For Immediate Release
Chicago, IL – April 28, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: BP plc (BP), Transocean (RIG), Devon Energy Inc. (DVN), 3M Company (MMM) and EI DuPont de Nemours & Co. (DD).
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Here are highlights from Tuesday’s Analyst Blog:
BP Beats, Battles Oil Spill
BP plc (BP) reported its first quarter 2010 results of $1.94 per American Depositary Share (ADS), significantly above the Zacks Consensus Estimate of $1.57 and year-earlier profit of 82 cents.
The replacement cost profit for the reported quarter rose 135% to $5.6 billion from $2.39 billion in the year-earlier period. Revenue jumped 55% to $74.4 billion.
Despite a broadly flat production volume, this earnings upside was driven by lower production costs and higher selling prices. The company sold oil for $71.86 per barrel (vs. $41.26 in the year-earlier quarter) and natural gas for $4.26 per thousand cubic feet (vs. $3.63). Total production for the quarter was flat year over year at 4.01 MMboe/d (million barrels of oil equivalent per day, 63% liquids).
The company’s dividend remains unchanged from the year-ago level. We believe that BP’s dividend is safe with the uptrend in oil prices.
However, BP shares were slightly lower in the early day trading, as the market continued to be concerned about the impact of the oil spill from the sunken Deepwater Horizon rig of Transocean (RIG) in the Gulf of Mexico (GoM). The crude spill at the rate of 1,000 barrels per day was caused by broken infrastructure followed by an explosion in the last week. The solid quarterly results were overshadowed by the disaster.
However, the company yesterday said that it is accelerating offshore oil recovery and continuing well control efforts following improving weather conditions in the GoM.
The profit from the refining and marketing business was $729 million, down 33% from the year-ago quarter due to poor refining margin which for the quarter was $3.08 per barrel compared with $6.20 per barrel in the first quarter of 2009. Total refinery throughput increased more than 8% year over year, while refining availability increased to 95.3% versus 92.3% in the first quarter of 2009.
BP spent $4.7 billion as capital expenditures in the reported quarter. The company has reaffirmed its capex budget to be in the range of $22 billion to $23 billion for the year, including disposal proceeds.
Net cash provided by operating activities for the quarter was $7.7 billion, compared with $5.6 billion a year ago. Net debt at the end of the quarter was $25.2 billion, representing a net debt-to-capitalization ratio of 19%.
Though the oil spill could hit the oil major temporarily, BP remains the largest producer in the GoM and has been successfully accessing substantial new resource opportunities. In the last month, the company purchased $7.0 billion assets from Devon Energy Inc. (DVN), which also includes assets in the U.S. deepwater GoM.
3M Beats Zacks Consensus
3M Company (MMM) reported first quarter 2010 earnings from continuing operations of $1.40 per share, exceeding the Zacks Consensus Estimate of $1.21.
First-quarter worldwide sales totaled $6.3 billion, up 24.7 % compared to the first quarter of 2009. Local-currency sales including acquisitions increased 19.8% and foreign exchange impacts added 5% to sales growth in the quarter.
Total sales grew at a double-digit rate in each of the company’s six business segments, with Display and Graphics up 42.4%; Electro and Communications up 38.6%; Industrial and Transportation up 29.3%; Safety, Security and Protection Services up 20.4%; Consumer and Office up 14.7%; and Health Care up 12%. Similarly, all geographic regions posted double-digit sales growth, led by Asia-Pacific at 54.1% and the combined Latin America/Canada region at 25.9%.
Each of the company’s six business segments posted double-digit sales growth and 20% plus operating income margins. Sales growth was strongest in emerging economies, where sales expanded by 47% versus the first quarter of 2009. Free cash flow more than doubled to $925 million and free cash flow conversion was 99% of net income.
Cash and equivalents were $4.5 billion, with long-term debt at $5 billion and shareowners’ equity at $13.8 billion.
DuPont Tops, Guides Higher
EI DuPont de Nemours & Co.’s (DD) first quarter fiscal 2010 earnings of $1.24 per share surpassed the Zacks Consensus Estimate of $1.05. The company had earned 54 cents in the year-ago quarter. The sharp improvement was attributable to the strong showing across all the segments of the company.
Net sales in the reported quarter climbed 23% year-over-year to $8.48 billion, driven by 19% higher volume, 2% higher local selling prices, a 3% positive impact from exchange rates in addition to a 1% reduction from portfolio changes. Total revenues in the quarter, including net Other income, came in at $8.84 billion as compared to $7.27 billion in the year-ago quarter.
The chemical maker raised its outlook for 2010. The company now expects to earn between $2.50 and $2.70 per share. The previous projection of the company was in the range of $2.15 – $2.45 per share. The Zacks Consensus Estimate for 2010 is $2.38 per share.
The improved forecast reflects stronger-than-expected sales growth and improved pre-tax operating margins based on continuing global economic expansion with strong demand particularly in the Asia-Pacific region. DuPont now expects free cash flow to be greater than $1.7 billion as opposed to the original expectation of greater than $1.7 billion.
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