Archive for April, 2009

Exxon misses despite general oil firm resilience (Reuters)

Thursday, April 30th, 2009 | Finance News

LONDON/SAN FRANCISCO (Reuters) –
Exxon Mobil Corp (XOM.N) disappointed investors who in the past week had grown accustomed to energy companies reporting better-than-expected profits despite the collapse in crude oil prices since July.

British gas producer BG Group Plc (BG.L) earlier on Thursday reported a smaller-than-expected drop in first-quarter profit, just as BP Plc (BP.L) and Royal Dutch Shell Plc (RDSa.L) did this week and ConocoPhillips (COP.N) did last week.

But Exxon, the world's largest listed company and the oil sector leader, said Thursday that profit fell 58 percent to $4.55 billion, missing forecasts.

Exxon shares fell 2.0 percent while shares of Marathon Oil Corp (MRO.N), which also reported earnings short of estimates, fell 2.3 percent. Other U.S. oil companies dropped in sympathy.

Mark Coffelt, head portfolio manager at Empiric Advisors in Austin, Texas, said Exxon offered a glimpse of what to expect generally from Chevron Corp (CVX.N) when it reports on Friday.

"I think they probably stack up pretty similarly," he said, adding that none of them could avoid the $100 drop in the price of a barrel of oil since July to about $50 now.

Apache Corp (APA.N), currently the top U.S. independent oil and natural gas producer by value, reported better-than-expected operating earnings, but had to take a $2 billion writedown due to a collapse in natural gas prices.

Exxon and BG's core oil and gas production units suffered big profit falls due to lower prices. BG's performance was compounded by a 5 percent fall in oil and gas production, while Exxon said output rose 2 percent to 4.2 million barrels of oil equivalent per day.

"International upstream (exploration and production) did not see the level of cost reduction that some of the other oil companies did," Jason Gammel, oil analyst at Macquarie Research, said of Exxon.

BG's first-quarter profit, excluding one-time items, fell 13 percent to 690 million pounds ($1 billion), but was ahead of a forecast of 613 million pounds from a Reuters Estimates analysts poll. BG shares rose 1.5 percent.

Its relatively strong results were largely driven by a big jump in profits from shipping liquefied natural gas around the world.

"BG Group's integrated gas business is reflected in the distinctive resilience of our profits and cash flow in this challenging economic environment," Chief Executive Frank Chapman said in a statement.

Analysts agreed.

"BG's strategy to hedge and protect its LNG profits has paid off," said Richard Griffith, analyst at Evolution Securities.

As for companies that serve the producers, Norwegian oil industry suppliers Aker Solutions ASA (AKSO.OL) and Fred. Olsen Energy (FOE.OL) posted bigger-than-expected profit rises, despite investors' fears that the oil services sector would be hardest hit by the drop in oil prices.

France's Technip (TECF.PA), which builds oil rigs and deepwater pipelines, also reported a forecast-beating rise in first-quarter profit and confirmed its 2009 outlook.

(Additional reporting by Wojciech Moskwa in Oslo, Matt Daily in New York, Anna Driver in Houston; Editing by Jon Loades-Carter, Rupert Winchester and Gerald E. McCormick)

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P&G profit beats view, but outlook trimmed (Reuters)

Thursday, April 30th, 2009 | Finance News

CHICAGO (Reuters) –
Procter & Gamble Co (PG.N) trimmed its fiscal 2009 outlook and did not offer a 2010 forecast on Thursday at a time when investors are searching for clarity amid the recession, and its shares fell about 2 percent.

The news also pushed down shares of rival Colgate-Palmolive Co (CL.N), even though it is still comfortable with Wall Street's expectations. Both household product makers posted better-than-expected quarterly profits.

"Volumes remain pretty weak and organic sales were probably the lowest that we've seen in a long time," RBC Capital Markets analyst Jason Gere said of P&G, on whose stock he has an "sector perform" rating. "The near-term outlook seemed just a bit more cautious.

"Here's a company that used to overdeliver and now you're seeing them kind of underperform relative to the peer group," he added.

P&G posted its first quarterly profit decline in more than seven years, since the first quarter of fiscal 2002.

It said it now expected to earn $4.20 to $4.25 a share in the fiscal year that ends in June, instead of the $4.20 to $4.35 it forecast back in January. It also said organic sales growth for the year, which excludes the impact of currency fluctuations, acquisitions and divestitures, would be 2 percent to 3 percent, instead of 2 percent to 5 percent.

P&G did not give a profit forecast for fiscal 2010, which begins in July.

P&G and Colgate hiked prices and cut costs to help offset weaker demand and the impact of the stronger dollar, which reduces the value of international sales. They are rolling out new products to entice thrifty consumers back to stores.

LOWER EARNINGS AT P&G

P&G, known for products such as Gillette razors and Tide laundry detergent, posted a 4 percent drop in quarterly profit as consumers switched to less-expensive items.

P&G earnings fell to $2.61 billion, or 84 cents per share, in the third quarter ended on March 31 from $2.71 billion, or 82 cents per share, a year earlier, when there were more shares outstanding. Analysts polled by Reuters Estimates had expected a profit of 80 cents a share.

Sales fell 8 percent to $18.42 billion, below the $18.88 billion analysts had forecast, including a 9 percent hit from the U.S. dollar. Volume declined 5 percent as retailers stocked fewer items and organic sales rose 1 percent.

Officials said they expect one more quarter of destocking by retailers, calling it a shorter-term dynamic.

P&G said it was comfortable with the analysts' consensus earnings-per-share estimate of $4.22 a share for the year, with a range of $4.20 to $4.25. P&G expects net sales to fall 2 percent to 4 percent this year, pressured by unfavorable foreign exchange.

For the current fourth quarter, P&G expects sales to drop 8 to 12 percent due largely to currency fluctuations, with organic sales flat to off 3 percent. It expects earnings in the range of 74 to 79 cents a share.

PROFIT UP AT COLGATE

Colgate, known for its namesake toothpaste, reported first-quarter profit of $507.9 million, or 97 cents per share, up from $466.5 million, or 86 cents per share, a year earlier. The results were a penny higher than analysts had expected.

Sales fell 5.5 percent to $3.50 billion, while analysts had forecast $3.57 billion. Unit volume fell 0.5 percent.

Both organic sales and global pricing increased 8 percent, and Chief Executive Ian Cook said that despite the recession Colgate continues to see consumers trading up to its premium products, even in emerging markets. He added Colgate had not seen trade destocking to any significant degree.

Cook said he is comfortable with external profit expectations for both the second quarter and the year.

Analysts expect Colgate to earn $1.05 a share in the second quarter and $4.22 for the year.

Shares of P&G fell 1.9 percent to $49.45 in afternoon New York Stock Exchange trade. Through Wednesday, the stock had fallen 18.4 percent this year.

Colgate stock, which had been down 12.9 percent year to date, was off 2.3 percent at $58.31.

Cook said Colgate had not really seen any impact on its Mexican business from influenza A (H1N1) and the company is keeping its Mexican facilities open. While P&G did not comment about the flu during its call, earlier this week the company imposed a temporary travel ban to Mexico.

(Reporting by Ben Klayman and Jessica Wohl; Editing by Lisa Von Ahn)

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FTSE climbs again as banks soar (AFP)

Thursday, April 30th, 2009 | Finance News

LONDON (AFP) –
Shares in London posted gains for a second straight day on Thursday as banks again led the way.

The FTSE 100 index of leading shares climbed 1.29 percent to close at 4,243.71 points.

Royal Bank of Scotland (RBS) led the blue chip risers for the second day running, climbing five pence -- or 13.59 percent -- to end at 41.8, followed by insurer Legal and General, which surged 6.7 pence -- or 12.98 percent -- to stand at 58.3.

Among the banks, Barclays also saw significant gains, adding 25 pence -- or 9.75 percent -- to finish at 281.5.

RBS was the day's most widely traded stock, seeing 218 million units change hands, followed by Vodafone, which saw 160 million switch owners.

Home Retail compounded Wednesday's poor performance to lead the fallers again, shedding 12 pence -- or 4.55 percent -- to finish at 251.75, while motor insurer Admiral Group dropped 39 pence -- or 4.11 percent -- to end at 911.

Elsewhere, the pound was up against the dollar and the euro.

Sterling was worth 1.4812 dollars at 15:58 BST, up from 1.4773 at Wednesday's close, while it rose to 1.1191 euros from 1.1134 over the same period.

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