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The Morning Ledger: Profits Aren't Luring Investors Back Into Oil |
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An Exxon tanker truck makes a stop at a gas station in Arlington, Va. PHOTO: J. SCOTT APPLEWHITE/ASSOCIATED PRESS
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Good day. Many of the world's largest energy companies have reported soaring third quarter profits, but investors aren't buying into the good news, The Wall Street Journal's Bradley Olson and Sarah Kent report.
Soaring profits. Exxon Mobil Corp. and Chevron Corp. reported 50% increases in third-quarter profits, while Total SA said earnings rose 40% from a year earlier. Their improved earnings rose at more than twice the rate of oil prices in the period. The top five Western oil companies, including Royal Dutch Shell PLC and BP PLC, which report next week, are on track to post the highest annual profits since crude plummeted three years ago.
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Share price blues. Investors aren't buying into the earnings rebound. This year, Exxon has fallen 7% and Chevron is down 3.5%. Shell’s American depositary receipts have risen nearly 13%, while Total and BP’s U.S. shares have had modest gains. All have fallen short of the increase in the S&P 500 index.
Fiscal discipline: Even as profits continue to improve, investors have soured on oil companies, put off by years of poor returns and strategies oriented toward growth that didn’t improve profitability. Only about $1.3 billion has flowed into energy-focused equity funds for the year through Oct. 20, compared with over $6 billion in 2016 and $20 billion in 2015, according to data from EPFR Global.
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The Federal Reserve Bank of Richmond will release its manufacturing activity survey at 10 a.m. ET. Economists surveyed by WSJ expect the survey to post a decline to 24 in October from 29 in September.
Verizon Communications Inc., 3M Co., Caterpillar Inc., JetBlue Airways Corp., McDonald's Corp. and Juniper Networks Inc. are among the companies reporting earnings today.
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The logo of Uber is pictured in Mexico City, Mexico, April 10, 2018. PHOTO: GINNETTE RIQUELME/REUTERS
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Uber CFO’s Stance on Non-GAAP Figures Could Impact
Valuation |
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Uber Technologies Inc. finance chief Nelson Chai’s position on whether to include adjusted earnings among the figures he shares with potential investors could influence the company’s market valuation, academic research indicates.
Companies that presented to investors using adjusted earnings or other figures not consistent with Generally Accepted Accounting Principles often nabbed a higher listing price, according to research by Nerissa Brown, an associate professor of accountancy at the University of Illinois at Urbana-Champaign. Her research analyzed a sample of almost 700 companies that went public between 2003 and 2012, but Ms. Brown thinks the findings still hold up today.
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U.K. Profit Warnings Decline Slightly in Q3 |
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U.K. public companies issued fewer profit warnings in the third quarter than in the same period a year ago but are facing dire prospects because of Britain’s exit from the European Union, according to a report by Ernst & Young LLP.
British companies listed in the FTSE warned in 68 cases they would miss their profit forecasts in the quarter ended Sept. 30, down from 75 in the prior year quarter, reports CFO Journal's Nina Trentmann.
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Masayoshi Son is seen speaking during a joint announcement with Toyota on Oct. 4. PHOTO: ALESSANDRO DI CIOMMO/ZUMA PRESS
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SoftBank Group Corp.’s Chief Executive Masayoshi Son has canceled his speaking role at a major Saudi Arabian business conference that kicks off today, a decision that could test the multibillion-dollar business partnership between the Japanese tech investor and the kingdom. Meanwhile, Total SA CEO Patrick Pouyanné on Monday defended his decision to attend the event.
Hasbro Inc. reported a 12% drop in third-quarter sales as the loss of Toys "R" Us Inc. business and the retailer's liquidation sales sapped demand for orders, while finding replacement for the lost business created complications.
Uber Technologies Inc.'s top deal maker, Cameron Poetzscher, has resigned from the company, a departure that comes less than a month after a Wall Street Journal article revealed allegations of prior sexual misconduct in the office.
Airline fuel budgets are about to get squeezed by shipowners, who are expect to start switching to cleaner-burning diesel fuel next year in a shift that could boost the price of jet fuel.
Kimberly-Clark Corp. said President and Chief Operating Officer Michael Hsu is set to become chief executive effective Jan. 1, succeeding CEO Thomas Falk, who will become executive chairman. The leadership change comes in the midst of a restructuring program aimed to boost profits.
Corona brewer Constellation Brands Inc. is exploring the sale of some of its U.S.-based wine brands in a deal that could be worth more than $3 billion, Reuters reports.
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The Linde Group logo is seen at a company building in Germany. PHOTO: MICHAELA REHLE/REUTERS
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German gas maker Linde AG said that the U.S. Federal Trade Commission has conditionally approved its merger with Praxair Inc., removing the last hurdle to thecompanies' yearslong pursuit of a tie-up.
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A California judge on Monday reduced by more than $200 million a jury verdict linking Bayer AG’s Roundup weedkiller to cancer but upheld the jury’s findings that the company acted with malice.
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Wells Fargo & Co. agreed to pay a $65 million fine to settle claims brought by the New York Attorney General’s office that the bank misled investors about its cross-selling tactics.
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Hedge funds and other alternative investments will no longer be called “shadow banks” by global regulators, lifting a label which has stuck to the sector since the financial crisis, Reuters reports.
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U.K. supermarket chain Wm. Morrison Supermarkets PLC lost a challenge to a High Court ruling according to which it is liable for a data breach that saw thousands of its employees' details posted online, the BBC reports.
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German Chancellor Angela Merkel told local lawmakers she didn’t think an LNG terminal would break even for at least a decade. PHOTO: EMMANUELE CONTINI/NURPHOTO/ZUMA PRESS
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German Chancellor Angela Merkel has offered government support to efforts to open up Germany to U.S. gas, a key concession to President Trump as he tries to loosen Russia’s grip on Europe’s largest energy market.
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The four largest U.S. banks — JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co. and Citigroup Inc. — reported a combined 5% drop in U.S. deposits that earn no interest in the third quarter from a year earlier.
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Puerto Rico bond prices soared Monday after the federal oversight board that runs the U.S. territory’s finances released a revised fiscal plan that raises expectations for disaster funding and economic growth.
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CVS Health Corp., the Woonsocket, R.I.-based pharmacy chain, named James Clark as controller and chief accounting officer following the closing of the proposed acquisition of Aetna Inc.
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Mr. Clark has been CVS Health's vice president of finance and accounting since September 2009. Prior to that, he spent 22 years at Deloitte & Touche LLP, including eight years as an audit partner.
Mr. Clark's salary will be increased to $400,000 in connection with his new role, and his 2018 target cash incentive will be increased to 45% of his salary. He will continue to participate in the company's equity incentive plans with an aggregate target of 137% of his salary, according to a filing.
Columbia Sportswear Co., the Portland sportswear maker, named Sabrina Simmons to its board of directors, effective immediately. She will also serve as a member of the nominating and corporate governance committee and the compensation committee.
Ms. Simmons served as the CFO of Gap Inc. from 2008 to 2017, and currently serves on the board and as the chair of the audit and finance committee for Williams-Sonoma Inc. She also serves as a member of the board and audit committee for e.l.f. Cosmetics Inc.
Ms. Simons will receive an annual retainer of $70,000 for board services and an annual retainer of $10,000 for services on each of the nominating and corporate governance committee and compensation committee. She will also receive an annual equity grant valued at $70,000 and a grant of time-based restricted stock units valued at $70,000, the company said in a filing.
ASOS PLC, a U.K. online fashion retailer, appointed Mathew Dunn as CFO. Mr. Dunn will take up his role in the spring of 2019 on a date yet to be announced, the company said. He joins from soft drinks maker Britvic PLC, where he has served as CFO since November 2015. Compensation details were not released.
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