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PCG | Will PG E Continue To Surge Higher | As of late it has definitely been a great time to be an investor in PG E Corporation NYSE PCG The stock has moved higher by 3 1 in the past month while it is also above its 20 Day SMA too This combination of strong price performance and favorable technical could suggest that the stock may be on the right path We certainly think that this might be the case particularly if you consider PCG s recent earnings estimate revision activity From this look the company s future is quite favorable as PCG has earned itself a Zacks Rank 2 Buy meaning that its recent run may continue for a bit longer and that this isn t the top for the in focus company You can see More Stock News This Is Bigger than the iPhone It could become the mother of all technological revolutions Apple NASDAQ AAPL sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years creating a 1 7 trillion market Zacks has just released a Special Report that spotlights this fast emerging phenomenon and 6 tickers for taking advantage of it If you don t buy now you may kick yourself in 2020 |
XOM | U S sanctions companies people over Russia actions in Ukraine | By Yeganeh Torbati WASHINGTON Reuters The United States on Tuesday targeted more Russian businessmen and companies over Russia s annexation of Crimea and the conflict in Ukraine slapping them with U S sanctions in a move Moscow criticized as hostile The measures come a month before U S President Barack Obama hands over power to President elect Donald Trump who has praised Russian President Vladimir Putin and said it would be good if the two countries could get along Trump s nominee for U S Secretary of State Exxon Mobil Corp NYSE XOM Chief Executive Officer Rex Tillerson has opposed U S sanctions on Russia which awarded him a friendship medal in 2013 The United States introduced sanctions on Russia after it annexed the Crimean peninsula from Ukraine in 2014 and expanded them over its support for separatist rebels in the East of the country But it is unclear if the United States will maintain the sanctions on Russia under Trump who could lift the executive orders that authorize the measures In a statement the U S Treasury named seven Russian businessmen six of whom it said were executives at Bank Rossiya or its affiliates ABR Management and Sobinbank The U S Treasury has called Bank Rossiya the personal bank for officials of the Russian Federation and had previously sanctioned it and the two affiliates One of the men named on Tuesday was Kirill Kovalchuk whom Russian media have identified as a nephew of Yuri Kovalchuk a major shareholder in Bank Rossiya The United States sanctioned Yuri Kovalchuk in 2014 saying he was a close adviser to Putin and his personal banker The U S Treasury also sanctioned several companies and government enterprises for operating in Crimea including two Russian firms it said were helping to build a multi billion dollar bridge to link the Russian mainland with the peninsula a project important to Putin The U S actions bar American individuals or companies from dealing with the sanctioned people or companies Treasury also named 26 subsidiaries of Russian Agricultural Bank and gas producer Novatek both of which had already been sanctioned in 2014 U S sanctions on those companies are relatively narrow and prohibit Americans from dealing in certain kinds of debt with them Novatek is Russia s largest non state gas producer Its chief executive and major shareholder is Leonid Mikhelson one of Russia s richest men Russia s Deputy Foreign Minister Sergei Ryabkov told TASS news agency that the sanctions were hostile acts by the outgoing Obama administration and Russia would expand its sanctions lists against the United States in response We retain the right to choose the time place and form of our responsive actions in a way that suits us Ryabkov told TASS RUSSIA HOPES FOR EASING OF SANCTIONS UNDER TRUMP U S State Department spokesman John Kirby in a news briefing on Tuesday denied suggestions that the timing of the measures was related to the transition next month This decision by the Treasury Department had nothing to do with the time on the clock Kirby said It had everything to do with Russia s activities and support for the separatists in Ukraine and for their occupation of Crimea The U S move comes a day after the European Union formally extended its economic sanctions on Russia s defense energy and financial sectors until mid 2017 a move E U leaders agreed to last week Trump s election and the mutual praise between him and Putin has stoked hopes in Russia that Western sanctions might be eased or lifted under his presidency potentially spurring investment in Russia s flat lining economy A reversal by Trump of existing sanctions or a softer U S stance on enforcing them could also weaken European sanctions resolve Valentina Matviyenko the speaker of the Federation Council the upper house of parliament told a news conference on Tuesday that Trump s forthcoming arrival in the White House promised to create the conditions for better U S Russia relations Commenting on what she referred to as anti Russian sanctions Matviyenko a close ally of Putin said she was sure that Western sanctions would be eased or lifted altogether in 2017 Trump may face opposition to easing restrictions on doing business with Russia by the U S Congress which has shown it has little patience for the Kremlin s military adventures
Both Republicans and Democrats have expressed concerns about Tillerson s ties to Russia and many Republicans in contrast to Trump view Putin as a calculating untrustworthy foe |
XOM | Senator McCain says has concerns about Tillerson nomination | VILNIUS Reuters U S President elect Donald Trump s choice for Secretary of State Rex Tillerson will have to explain his relationship with Russian leader Vladimir Putin at his confirmation hearing senior Republican senator John McCain said on Thursday McCain who is chairman of the U S Senate Armed Services Committee also called President Putin a thug and a murderer Speaking on a tour of the Baltic states where there is widespread concern that Moscow wants to reassert its power across the region McCain said he had concerns about Tillerson who opposed sanctions on Russia after its annexation of Crimea I and several of my colleagues have concerns about Mr Tillerson and some of his past activities specifically his relationship with Vladimir Putin McCain told reporters I have concerns but at the same time I m certain we will give Mr Tillerson an opportunity to make his case about why he is qualified to be Secretary of State Exxon Mobil NYSE XOM Chief Executive Tillerson could face a rocky confirmation process given worries among both Democrats and Republicans about his connections with Russia and possible conflicts of interest related to his business ties Relations between Moscow and Washington have deteriorated following Russia s annexation of the Crimea in 2014 with the two nations also at loggerheads over Syria The Obama administration also plans a series of retaliatory measures against Russia for hacking into U S political institutions and individuals and leaking information Trump has said that the United States should move on from the controversy McCain however said the United States needed to reassure voters there and abroad that elections would not be influenced by foreign powers I agree with president elect that we need to get on of our lives without having elections being affected by any outside influence especially Vladimir Putin who is a thug and a murderer he said Fellow Republican senator Lindsey Graham who is traveling with McCain called for sanctions against Russia to be widened to target areas like energy and to be directly aimed at Putin I think the sanctions need to go beyond what it is today they need to name Putin as an individual and his inner circle because nothing happens in Russia without his knowledge and approval Graham said |
CSCO | Rookies Of The Year The 4 Most Successful IPOs Of 2016 | by Clement Thibault
This is Part III of our four part series about how specific groups of stocks repaid investors in 2016
Part I Best Comeback Stocks Of 2016 was published right before the Christmas holiday Part II SPX MVPs The 5 Best Performing Stocks of 2016 was published earlier this week We borrowed our designations from the world of sports Early next week we ll publish our final installment in the series a look at the stocks that most disappointed investors the draft picks that turned out to be a bust
The 2016 Initial Public Offering IPO market was not an exciting one by any measure Following on the heels of 2013 which gave investors the chance to own shares of Twitter NYSE TWTR and 2014 when Alibaba NYSE BABA made its debut in the markets and 2015 when high end automotive enthusiasts were finally able to take a stake in Ferrari NYSE RACE even if they couldn t afford the car itself expectations of a splashy IPO during 2016 never materialized Indeed our hopes were focused on Snapchat which it turns out at least as of this writing is slated to go public in March
Unfortunately we re equally disappointed with the quantity of IPOs that occurred in 2016 The average number of IPOs over the past three years is 284 but this year gave us only 124 IPOs less than half of the three year average and the smallest number of IPOs since 2009
Courtesy Callum Thomas
There are a few plausible explanations for the slowdown in IPOs First the market s abysmal performance at the beginning of this year had a deleterious effect on many companies considering an IPO as understandably it s never smart to issue shares when markets are depressed
Venture capital funds also appear to have a hand in the current situation It looks like they may be keeping some of their companies private for longer There are now more unicorns doing business than ever before private startups valued at one billion dollars or more Right now it is estimated that there are upward of 180 such companies including Uber and Chinese manufacturer Xiaomi at the top of the list worth 68 and 46 billion dollars respectively
Still even in a year as dull as this one there were a few very successful IPOs with returns of over or close to 100 from their first day of trading
Note that while most publications focus solely on IPO price we find that metric to be irrelevant for individual investors since the IPO price is reserved for institutional investors who get in on the action earlier than the common investor who doesn t have access to shares at that early price
Though we mention the IPO price we ve calculated returns based on the opening price on each stock s first day of public trading on its respective exchange
4 Impinj Inc
IPO price 14
Began trading at 18 July 21st
Current price 35 64
Gain 17 64 98
Impinj NASDAQ PI manufactures referral and information network RAIN radio frequency identification RFID solutions that provide item intelligence in retail pharmaceutical healthcare food and beverage and manufacturing and supply chain logistics The company s platform uses RAIN RFID to wirelessly connect and network everyday items such as inventory and assets to software applications such as enterprise resource planning systems and management systems
According to its IPO filing Impinj estimates its market share of the passive RFID tag customer base is about 65 While the world hasn t yet adopted the technology at the rate the company anticipated if and when the RFID boom occurs Impinj is set to reap the rewards Until then a 30 revenue growth from year to year is a fine accomplishment too
3 Merus BV
IPO price 10
Began trading at 9 75 May 19th
Current price 20 97
Gain 10 97 109
Merus BV NASDAQ MRUS is a biotechnology company focusing on oncological treatments The company has three drugs for breast colon and ovarian cancer all in clinical trials
Shares jumped 53 on December 21st when it was announced that Incyte NASDAQ INCY will pay approximately 200 million total to gain access to Merus research It has also been agreed that Incyte will fund the development and commercialization of Merus drugs in a deal that could potentially be worth 2 8 billion to Merus
2 Acacia Communications
IPO price 23
Began trading at 29 May 13th
Current price 65 90
Gain 36 9 127
Acacia Communications NASDAQ ACIA innovation optical interconnect products that use special silicon photonic integrated circuits that convert light coming off of fiber optic cable into usable data While fiber optic technology has been around for a while Acacia s silicon circuits are more efficient taking up less space and generating more power thus giving them a technological advantage over older circuits
Such circuits are used largely by big data center that require ultra fast data transfer Cisco NASDAQ CSCO and Huawei the Chinese networking and telecommunications company are customers ACIA s quarterly revenue has grown by 100 year over year for the second quarter in a row which helps explain the phenomenal growth in share price since the IPO
1 AveXis Inc
IPO price 20
Began trading at 18 02 February 11th
Current price 48 59
Gain 30 57 169
AveXis NASDAQ AVXS is a biotech specializing in gene therapy specifically the company is looking to find genetic treatments for orphan neurological diseases AVXS is developing a treatment for spinal muscular therapy SMA type 1 a disease caused by a genetic defect that leads to the loss of motor neurons resulting in progressive muscle weakness and paralysis
The treatment candidate AVXS 101 is currently in Phase 1 human clinical trials This past July the treatment received the FDA s Breakthrough Therapy designation based on positive clinical trials This enables the company to fast track the drug s development and testing via the FDA
Medical research companies are often some of the market s most volatile stocks because there is often little data available on their work coupled with hefty expectations and thus hit or miss for investors Shares shoot up on good news and crash on hiccups in the research It s a similar situation for Merus mentioned above
Nonetheless as long as the probability of AveXis treatment reaching approval and distribution seems likely its share price will continue to rise
Author s Note A shout out is due as well to ZTO Express Cayman Inc NYSE ZTO a Chinese delivery firm that raised 1 4 billion dollars and was the biggest IPO of the year Unfortunately the biggest IPO was also one of the year s biggest flops In three short months the company lost a third of its value falling from 18 40 to 12 31
An additional honorable mention goes to Twilio NYSE TWLO a cloud based communication platform that started trading on June 23rd at 23 99 shot up 195 to 70 96 during late September only to fall back to earth during Q4 to trade at 30 21
You can read Part 1 of this series here Part 2 here |
XOM | Gassing Up Your Portfolio With Exxon Mobil | Around my part of the world it is Mobil at the pumps But I grew up with my mother working for Exxon She was a computer programmer modeling sludge movement for the engineers Bad ass So I am comfortable with both brands and the combination of name despite the signage
The stock went through a long downturn with falling oil prices but found a bottom in January Since then it has moved higher is a rising channel After a 30 move higher in just under 5 months it broke that channel to the down side Wednesday and is following through today
The 200 day SMA stands below at about 84 The stock has not been in contact with that since the Golden Cross printed February 24th Momentum indicators support more downside in the stock
The RSI has fallen below 40 moving into the bearish zone It is also making a new 6 month low The MACD crossed down in the middle of the month and is about to turn negative The Bollinger Bands are also opening to the downside
There is a case for support below at the prior lows from 87 50 to 88 and then at 85 before 82 A 38 2 retracement of the move higher would mean a pullback to 86 39 On a reversal higher there may be resistance at 92 and 93 75 before 95 50 Short interest is just over 1 in this stock so not a factor
The weekly options chain shows that traders expect the stock to move 1 75 by Friday s close That 1 94 move is slightly less than the 2 13 move it has seem following the last 6 reports
The open interest is biggest on the put side at the 89 and 90 strikes with smaller pockets at 87 5 and from 91 to 92 5 On the call side the biggest open interest stands at 95 with some size at 97 5
ExxonMobil NYSE XOM
Trade Idea 1 For the long holder protection can be had by buying a weekly 90 Put for about 0 90 This gives protection as far down as the stock might go If comfortable that the options traders have the move measured correctly at 1 75 then you can also sell the weekly 88 Put for about 25 cents to cut your cost by 25
With the large open interest at the 89 Strike you might consider selling that for a tighter spread and another 25 reduction Then selling an August 92 5 Covered Call for 40 cents brings your down even further Full Collar Long July 29 Expiry 90 89 Put Spread and selling August 92 5 Call for free
Trade Idea 2 For the speculator the path of least resistance looks lower A Put or Put Spread of some sort looks appropriate Buying a 1 2 Put Spread or a Put Butterfly can give a range to the downside very cheaply
The weekly 90 89 1 2 Put Spread buying the 90 Put and selling 2 of the 89 Put gives downside participation until 89 and then still makes money until 88 this trade pays a 5 cent credit It also expose you to owning the stock with a basis of 88 if you do not want to own it then also buy a 88 Put to make a Put Butterfly Put Butterfly Buy the July 29 Expiry 90 89 88 Put Butterfly for 22 cents
Trade Idea 3 If you wish to own this stock but from a lower level then a 1 2 Put Spread or a a Put Diagonal fits your view The 1 2 Put Spread is discussed above For a Put Diagonal we look out the August expiry and see very large open interest at the 85 strike
Remember this is very near the 200 day SMA Buying the weekly Puts and selling the August puts creates the Diagonal Combining these two gives short term downside participation and then a possible entry in August July 29 Expiry 90 July 29 Expiry 89 August 85 1 2 Split Put Spread for 6 cents
DISCLAIMER The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment I or my affiliates may hold positions or other interests in securities mentioned in the Blog please see my page for my full disclaimer |
XOM | Oil Prices Plummet On Continued Supply Glut | After a much needed bullish run to start the summer it appears that the upward momentum of oil prices has completely reversed Oil futures declined over 15 in July and prices continued to fall even further to begin the new month today
The price of the West Texas Intermediate WTI benchmark slumped 1 34 or 3 22 to 40 26 per barrel on Monday morning while Brent crude the international benchmark fell 1 29 or 2 96 to 42 24 per barrel
Oil s price slip on Monday morning is mostly due to the latest data from OPEC The 13 member organization saw supply increase to 33 41 million barrels per day in July That figure was up from 33 31 million barrels per day in June Most of the increase in supply can be attributed to higher shipments from Nigeria and Iraq
Nigerian supply had previously taken a hit after several attacks from militant groups put a dent in the country s output July s production indicates that the effects of the attacks are seemingly nullified and the nation s capacity to produce oil has recovered
It comes as no surprise that production from OPEC nations is once again driving prices lower Oil has continued to struggle since OPEC decided to abandon its historic policy of limiting supply to maintain prices back in late 2014 In an effort to curb the competitiveness of new U S based oil extraction techniques like fracking OPEC countries have flooded the worldwide market
This nearly two year saga with oil prices is also starting to impact even the most giant oil companies Industry leader ExxonMobil NYSE XOM just released its second quarter earnings results last week and both earnings and revenue came in below our consensus estimates
In fact Exxon s profit fell 59 to 1 7 billion in the quarter While that may seem like a lot compared to smaller oil companies that are struggling to even turn profits right now that 1 7 billion actually represents the lowest profit the company has turned since 1999
While oil prices peaked at over 50 a barrel in June the month of July showed us that the outside factors affecting worldwide supply were not that great and prices shot down once again As we know by now oil most likely will not regain any substantial momentum until there is a concerted effort by OPEC nations to once again limit supply |
XOM | Top Trade Ideas For The Week XOM | Here is your Bonus Idea with links to the full Top Ten
ExxonMobil NYSE XOM stock went through a long downturn with falling oil prices but found a bottom in January Since then it has moved higher is a rising channel After a 30 move higher in just under 5 months it broke that channel to the down side Wednesday and followed through when it reported earnings Friday
The 200 day SMA stands below at about 84 The stock has not been in contact with that since the Golden Cross printed February 24th Momentum indicators support more downside in the stock but are also starting to show oversold
The RSI has fallen to 30 and making a nearly 8 month low The MACD crossed down in the middle of the month and just turned negative The stock price fell out of the Bollinger Bands Friday which have opened to the downside
Friday saw a touch at a 38 2 retracement of the leg higher and strong buying all day after the gap down The Hammer candle is a case for support and a reversal Below there is possible support at the prior lows at 87 50 and then at 85 before 82
On a reversal higher there may be resistance at 90 and 92 before 93 75 and 95 50 Short interest is just over 1 in this stock so not a factor The stock will trade ex dividend starting August 10th
The weekly options chain shows large open interest at the 88 and 89 Puts and smaller size at the 90 Put and 90 5 Calls Note almost all open interest this week is above August monthly options see very large open interest at the 85 Put Strike and then even higher at the 92 5 Strike above
On the Call side it is biggest at 90 92 5 and 95 but all smaller than the Put volume September and October options show an upward bias
ExxonMobil Ticker XOM
Trade Idea 1 Buy the stock on a move over 89 with a stop at 86 50
Trade Idea 2 Buy the stock on a move over 89 and add a August 88 5 85 Put Spread 1 10 while selling a September 2 Expiry 90 Covered Call 85 cents just 35 cents for the collar protection
Trade Idea 3 Buy the August 5 Weekly 88 August 90 bullish Risk Reversal for 14 cents
Trade Idea 4 Buy the August October 90 Call Calendar for 1 43
Trade Idea 5 Buy the August October 90 Call Calendar and sell the August October 85 Put Calendar for 21 cents
Trade 1 is a straight stock buy for a reversal while Trade 2 adds a collar for short term protection to 85 for a small fee Trade 3 is a leveraged short term trade for a reversal higher Trade 4 is a longer term trade for upside looking for 90 to stall it in the short term and Trade 5 adds short term downside protection participation with leverage
After reviewing over 1 000 charts I have found some good setups for the week These were selected and should be viewed in the context of the broad picture reviewed Friday which heading into August sees the Equity markets still look strong but the smaller cap and technology laden indexes stronger than the large caps
Elsewhere look for Gold to continue its uptrend while Crude Oil continues lower The US Dollar Index looks better to the downside short term while US Treasuries are biased higher The Shanghai Composite looks like it will continue to drift lower while Emerging Markets move higher
Volatility looks to remain at abnormally low levels keeping the bias higher for the equity index ETF s SPDR S P 500 NYSE SPY iShares Russell 2000 NYSE IWM and PowerShares QQQ Trust Series 1 NASDAQ QQQ
Their charts show real strength in the QQQ with the IWM ready to join it moving higher while the SPY takes a pause Use this information as you prepare for the coming week and trad em well
DISCLAIMER The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment I or my affiliates may hold positions or other interests in securities mentioned in the Blog please see my page for my full disclaimer |
PCG | Why PG E PCG Might Surprise This Earnings Season | Investors are always looking for stocks that are poised to beat at earnings season and PG E Corporation NYSE PCG may be one such company The firm has earnings coming up pretty soon and events are shaping up quite nicely for their report That is because PG E is seeing favorable earnings estimate revision activity as of late which is generally a precursor to an earnings beat After all analysts raising estimates right before earnings with the most up to date information possible is a pretty good indicator of some favorable trends underneath the surface for PCG in this report In fact the Most Accurate Estimate for the current quarter is currently at 1 02 per share for PCG compared to a broader Zacks Consensus Estimate of 99 cents per share This suggests that analysts have very recently bumped up their estimates for PCG giving the stock a Zacks Earnings ESP of 3 03 heading into earnings season Pacific Gas Electric Co Price and EPS Surprise Why is this Important A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises and outperforming the market Our recent 10 year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank 3 Hold or better show a positive surprise nearly 70 of the time and have returned over 28 on average in annual returns see more Given that PCG has a Zacks Rank 3 and an ESP in positive territory investors might want to consider this stock ahead of earnings You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here Clearly recent earnings estimate revisions suggest that good things are ahead for PG E and that a beat might be in the cards for the upcoming report 7 Best Stocks for the Next 30 DaysJust released Experts distill 7 elite stocks from the current list of 220 Zacks Rank 1 Strong Buys They deem these tickers Most Likely for Early Price Pops Since 1988 the full list has beaten the market more than 2X over with an average gain of 24 5 per year So be sure to give these hand picked 7 your immediate attention |
PCG | Atmos Energy ATO To Report Q4 Earnings What s In Store | Atmos Energy Corporation NYSE ATO is set to report fourth quarter fiscal 2019 results on Nov 6 after the market closes This natural gas distribution company delivered a negative earnings surprise of 1 45 in the last reported quarter Let s see how things have shaped up before the upcoming earnings announcement Factors at PlayRate revision in Atmos Energy s Distribution and Pipeline Storage segments is likely to have positively impacted fourth quarter earnings The company has been experiencing increase in customer volumes in its service territories This is likely to have continued in the quarter and positively impacted net income The Zacks Consensus Estimate for total revenues and earnings per share EPS for fourth quarter fiscal 2019 is currently pegged at 577 8 million and 48 cents respectively The revenue and EPS estimates indicate growth of 29 93 and 17 07 respectively from the year ago reported figures What Our Quantitative Model PredictsOur proven model does not conclusively predict an earnings beat for Atmos Energy this season A stock needs to have both a positive and a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold to surpass estimates That is not the case here as you will see below You can see Earnings ESP The company s Earnings ESP is 0 00 You can uncover the best stocks to buy or sell before they re reported with our Zacks Rank Atmos Energy currently carries a Zacks Rank 2 Atmos Energy Corporation Price and EPS Surprise
Stocks to ConsiderInvestor can consider the following players from the same sector that have the right combination of elements to post an earnings beat in the to be reported quarter Pacific Gas Electric Co NYSE PCG is slated to release third quarter 2019 results on Nov 4 It has an Earnings ESP of 3 03 and a Zacks Rank 3 South Jersey Industries Inc NYSE SJI is scheduled to release third quarter 2019 results on Nov 6 It has an Earnings ESP of 15 85 and a Zacks Rank 3 Spire Inc NYSE SR is set to release fourth quarter fiscal 2019 results on Nov 21 It has an Earnings ESP of 2 55 and a Zacks Rank 2 7 Best Stocks for the Next 30 DaysJust released Experts distill 7 elite stocks from the current list of 220 Zacks Rank 1 Strong Buys They deem these tickers Most Likely for Early Price Pops Since 1988 the full list has beaten the market more than 2X over with an average gain of 24 5 per year So be sure to give these hand picked 7 your immediate attention |
PCG | PG E PCG Q3 Earnings And Revenues Beat Estimates | PG E PCG came out with quarterly earnings of 1 11 per share beating the Zacks Consensus Estimate of 0 99 per share This compares to earnings of 1 13 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 12 12 A quarter ago it was expected that this utility holding company would post earnings of 0 97 per share when it actually produced earnings of 1 10 delivering a surprise of 13 40
Over the last four quarters the company has surpassed consensus EPS estimates four times
PG E which belongs to the Zacks Utility Electric Power industry posted revenues of 4 43 billion for the quarter ended September 2019 surpassing the Zacks Consensus Estimate by 0 91 This compares to year ago revenues of 4 38 billion The company has topped consensus revenue estimates just once over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
PG E shares have lost about 70 9 since the beginning of the year versus the S P 500 s gain of 22 7
What s Next for PG E
While PG E has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for PG E was mixed While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 3 Hold for the stock So the shares are expected to perform in line with the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 0 79 on 4 10 billion in revenues for the coming quarter and 3 91 on 16 59 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Utility Electric Power is currently in the top 39 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
PCG | Why Is PG E PCG Up 60 3 Since Last Earnings Report | It has been about a month since the last earnings report for PG E PCG Shares have added about 60 3 in that time frame outperforming the S P 500
Will the recent positive trend continue leading up to its next earnings release or is PG E due for a pullback Before we dive into how investors and analysts have reacted as of late let s take a quick look at the most recent earnings report in order to get a better handle on the important drivers PG E Corporation Q3 Earnings Beat Revenues Up Y YPG E Corporation reported adjusted operating earnings per share of 1 11 in third quarter 2019 which surpassed the Zacks Consensus Estimate of 99 cents by 12 1 The bottom line however declined 1 8 from the year ago quarter s figure Including one time items the company incurred a GAAP loss of 3 06 per share against the earnings of 1 09 in the prior year quarter Revenue Update PG E Corp s total revenues of 4 432 million surpassed the Zacks Consensus Estimate of 4 392 million by 0 9 The top line also improved 1 2 from the year ago quarter While electric revenues improved 2 5 from the prior year quarter s figure natural gas revenues declined 4 year over year Operational Highlights Operating expenses in the reported quarter totaled 6 732 million which surged 82 7 from 3 685 million in third quarter 2018 The increase was due to elevated operating and maintenance expenses higher wildfire related claims and escalated depreciation amortization and decommissioning expenses The company incurred operating losses of 2 300 million against the operating income of 696 million in the previous year s third quarter Interest expenses in third quarter 2019 summed 52 million compared with 232 million in the year ago period GuidancePG E Corp has not provided guidance for 2019 GAAP earnings and adjusted earnings from operations due to the continuing uncertainty related to the 2018 Camp Fire the 2017 Northern California wildfires the Chapter 11 proceedings and legislative and regulatory reforms
How Have Estimates Been Moving Since Then
Estimates revision followed a downward path over the past two months
VGM Scores
At this time PG E has an average Growth Score of C though it is lagging a bit on the Momentum Score front with a D However the stock was allocated a grade of A on the value side putting it in the top 20 for this investment strategy
Overall the stock has an aggregate VGM Score of B If you aren t focused on one strategy this score is the one you should be interested in
Outlook
PG E has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
PCG | Can Value Investors Consider Pacific Gas Electric PCG | Value investing is easily one of the most popular ways to find great stocks in any market environment After all who wouldn t want to find stocks that are either flying under the radar and are compelling buys or offer up tantalizing discounts when compared to fair value One way to find these companies is by looking at several key metrics and financial ratios many of which are crucial in the value stock selection process Let s put Pacific Gas Electric Co NYSE PCG stock into this equation and find out if it is a good choice for value oriented investors right now or if investors subscribing to this methodology should look elsewhere for top picks PE RatioA key metric that value investors always look at is the Price to Earnings Ratio or PE for short This shows us how much investors are willing to pay for each dollar of earnings in a given stock and is easily one of the most popular financial ratios in the world The best use of the PE ratio is to compare the stock s current PE ratio with a where this ratio has been in the past b how it compares to the average for the industry sector and c how it compares to the market as a whole On this front Pacific Gas Electric has a trailing twelve months PE ratio of 3 04 as you can see in the chart below This level actually compares pretty favorably with the market at large as the PE for the S P 500 stands at about 19 57 If we focus on the long term PE trend Pacific Gas Electric s current PE level puts it below its midpoint of 13 58 over the past five years Moreover the current level stands well below the highs for the stock suggesting that it can be a solid entry point Further the stock s PE also compares favorably with the Zacks Utiities sector s trailing twelve months PE ratio which stands at 16 83 At the very least this indicates that the stock is relatively undervalued right now compared to its peers We should also point out that Pacific Gas Electric has a forward PE ratio price relative to this year s earnings of just 2 88 so it is fair to say that a slightly more value oriented path may be ahead for Pacific Gas Electric stock in the near term too P S RatioAnother key metric to note is the Price Sales ratio This approach compares a given stock s price to its total sales where a lower reading is generally considered better Some people like this metric more than other value focused ones because it looks at sales something that is far harder to manipulate with accounting tricks than earnings Right now Pacific Gas Electric has a P S ratio of about 0 4 This is a bit lower than the S P 500 average which comes in at 3 38x right now Also as we can see in the chart below this is well below the highs for this stock in particular over the past few years If anything this suggests some level of undervalued trading at least compared to historical norms Broad Value OutlookIn aggregate Pacific Gas Electric currently has a Value Score of A putting it into the top 20 of all stocks we cover from this look This makes Pacific Gas Electric a solid choice for value investors and some of its other key metrics make this pretty clear too For example the PEG ratio for Pacific Gas Electric is just 1 15 a level that is far lower than the industry average of 3 81 The PEG ratio is a modified PE ratio that takes into account the stock s earnings growth rate Clearly PCG is a solid choice on the value front from multiple angles What About the Stock Overall Though Pacific Gas Electric might be a good choice for value investors there are plenty of other factors to consider before investing in this name In particular it is worth noting that the company has a Growth Score of C and a Momentum Score of C This gives PCG a Zacks VGM score or its overarching fundamental grade of B You can read more about the Zacks Style Scores Meanwhile the company s recent earnings estimates have been mixed at best The current quarter has seen none estimate go higher in the past sixty days compared to one lower while the full year estimate has seen one up and none down in the same time period This has had a mixed impact on the consensus estimate though as the current quarter consensus estimate has risen by 13 3 in the past two months while the full year estimate has inched higher by 0 3 You can see the consensus estimate trend and recent price action for the stock in the chart below Pacific Gas Electric Co Price and Consensus This somewhat mixed trend is why the stock has just a Zacks Rank 3 Hold and why we are looking for in line performance from the company in the near term Bottom LinePacific Gas Electric is an inspired choice for value investors as it is hard to beat its incredible lineup of statistics on this front Further a strong industry rank among Top 36 of more than 250 industries instills our confidence However over the past two years the Zacks Utilities Electric Power industry has clearly underperformed the broader market as you can see below So value investors might want to wait for estimates and analyst sentiment to turn around in this name first but once that happens this stock could be a compelling pick 5 Stocks Set to DoubleEach was hand picked by a Zacks expert as the 1 favorite stock to gain 100 or more in 2020 Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth Most of the stocks in this report are flying under Wall Street radar which provides a great opportunity to get in on the ground floor |
XOM | G20 task force wants companies to come clean on climate risk | By Nina Chestney LONDON Reuters Companies will be asked to disclose how they manage the risks to their business from climate change and greenhouse gas emission cuts by a global task force set up to try to prevent market shocks from the warming of the planet Although the measures recommended by the Task Force on Climate Related Financial Disclosures TCFD are voluntary some of its members argue they should become mandatory Only then will climate risk become integral to corporate governance and how we all do business Mark Wilson chief executive of insurance firm Aviva LON AV Plc said in a statement The TCFD was called for by the Group of 20 economies and set up by the G20 s Financial Stability Board FSB It recommended on Wednesday that companies disclose how they identify assess and manage climate risks and opportunities and how risks in the short medium and long term impact their business strategy and financial planning They should also describe the potential impact of limiting global temperature rise to 2 degrees C on their business and how greenhouse gas emission cuts will impact their bottom line The disclosure recommendations will give financial markets the information they need to manage risks and seize opportunities stemming from climate change Bank of England Governor Mark Carney who chairs the FSB said Concerns among the financial community are growing that assets are being mispriced because the full extent of climate risk is not being factored in threatening market stability According to Barclays LON BARC the fossil fuel industry could lose 34 trillion in revenues by 2040 as a global deal to limit temperature rise to well below 2 degrees Celsius reduces demand for oil coal and gas turning reserves into stranded assets There are also calls for increased company transparency U S oil company Exxon Mobil Corp NYSE XOM is currently being investigated in the United States on whether it misled investors and the public about climate risks The TCFD wants all financial and non financial organizations with public debt or equity such as asset managers insurance companies endowments and foundations to implement its recommendations It has 32 members from large banks insurance companies asset management companies pension funds credit rating agencies and accounting and consulting firms A 60 day public consultation will run until Feb 12 2017 to get feedback on the recommendations |
XOM | U S oil industry cheers Trump energy pick seeks gas export boost | WASHINGTON Reuters The U S oil and gas industry on Wednesday welcomed President elect Donald Trump s choice of former Texas Governor Rick Perry to head the U S Department of Energy and wasted no time making its first specific request of him to support increased exports of America s natural gas overseas Trump named Perry as his pick for the top U S energy job on Wednesday morning handing the portfolio to a climate change skeptic with close ties to the oil and gas industry and who previously proposed abolishing the department The choice adds to a list of drilling proponents who have been tapped for top jobs in Trump s administration worrying environmental groups but fitting neatly with Trump s promise to revive oil and gas drilling and coal mining as president by cutting back on federal regulation Jack Gerard president of the Washington based American Petroleum Institute representing oil and natural gas companies said he welcomed Perry s nomination and called on him to make increasing exports of U S natural gas a top priority As the former governor of Texas Rick Perry knows the important impact that energy production has on our nation s economy In his new role at the Energy Department he has the opportunity to encourage increased exports of domestically produced natural gas he said in a statement Natural gas companies are eager to access foreign markets for their supply after a decade long drilling boom that triggered a domestic glut and depressed prices The oil industry successfully lobbied for an end to a decades old crude oil export ban in December 2015 following a slump in prices a move meant to help American companies weather lower prices at home There is no ban on natural gas exports but U S law requires American companies to obtain authorization from the Energy Department before being able to ship it overseas and there are tough permitting requirements for building the specialized facilities that make shipping gas possible The United States exported its first cargo of liquefied natural gas earlier this year from an export facility on the Gulf Coast but the industry has complained that boosting exports to match global demand has been constrained by a slow and opaque bureaucratic process U S energy exports have long been a contentious political issue dividing lawmakers seeking to balance the benefits of low consumer prices at home and American energy independence against opportunities for companies to expand access to potentially lucrative foreign markets BUSINESS CLIMATE Trump who takes office on Jan 20 has made energy a central part of his agenda vowing a revival in the oil gas and coal industries and picking industry allies for top administration jobs On Tuesday Trump selected oil giant Exxon Mobil NYSE XOM Corp s CEO Rex Tillerson as secretary of state His Environmental Protection Agency pick is Oklahoma Attorney General Scott Pruitt a foe of Democratic President Barack Obama s initiatives to combat climate change Trump said during his campaign he would pull the United States out of a global deal to curb emissions of carbon dioxide signed in Paris last year though he has since confused observers by saying he would keep an open mind on the accord An overwhelming number of scientists say carbon dioxide from burning fossil fuels contributes to changes to the climate that are leading to sea level rise droughts and more frequent violent storms Trump s transition team said Perry s tenure leading Texas the nation s second most populous state and a major producer of oil gas and wind power from 2000 until 2015 made him a strong pick for energy secretary Trump said in a statement Perry had created a business climate that produced millions of new jobs and lower energy prices in his state and he will bring that same approach to our entire country as secretary of energy The department is responsible for U S energy policy and oversees the nation s nuclear weapons program Perry is a former presidential rival and critic of Trump who unsuccessfully sought the Republican nomination in 2016 and 2012 His nomination requires Senate confirmation If confirmed he would replace Ernest Moniz a physicist who was one of the chief negotiators in last year s Iran nuclear deal After his tenure as Texas governor Perry joined the board of directors of Energy Transfer Partners a Texas based company building the Dakota Access Pipeline in North Dakota that has been stalled by protests by the Standing Rock Sioux tribe and supporters Anthony Scaramucci a member of the Trump transition team s executive committee said the president elect was focused on preserving the environment as well as boosting U S energy production Whether you believe in climate change or not we want clean air we want clean water for the American people What we also want is energy independence Scaramucci told CNN Billionaire environmental activist Tom Steyer who backed Trump s Democratic opponent Hillary Clinton in the Nov 8 election said he hoped Perry s nomination would be blocked
Trump no longer has to abolish departments He can dismantle them from within Steyer said It s now up to the Senate to defend our health our economy and our democracy by defeating this nomination |
XOM | Wall St slides after Fed raises rates energy weighs | By Rodrigo Campos NEW YORK Reuters U S stocks fell the most in two months on Wednesday after the Federal Reserve raised interest rates by a quarter point and signaled hikes could come next year at a faster pace than some expected Energy stocks weighed the most on the S P 500 after a sharp drop in U S crude oil prices The Fed s decision to raise rates comes as President elect Donald Trump who will be sworn in next month is seen cutting taxes and increasing spending on infrastructure Fed Chair Janet Yellen indicated the central bank was at the margins adapting to Trump as some committee members began shifting fiscal policy assumptions to slightly faster growth and lower unemployment Stocks sold off during Yellen s press conference after the Fed statement She walked back from recent comments that hinted the Fed could allow the economy to run hot for a certain time meaning inflation could slightly overshoot and unemployment could remain low before the Fed felt the need to tighten policy faster Yellen seemed to dampen expectations about her willingness to allow that to happen If the Fed is seen less willing to let the economy run hot markets are going to react said Brian Jacobsen chief portfolio strategist at Wells Fargo NYSE WFC Funds Management in Menomonee Falls Wisconsin Markets had all but priced in a rate increase by the Fed but the faster pace of increases seen next year may give traders an excuse to cash in the recent gains Since the Nov 8 U S presidential election stocks have rallied on bets that Trump s expected business friendly policies will stimulate the economy However some market participants are concerned that equities are pricing in a very favorable scenario leaving them vulnerable The Dow Jones industrial average fell 118 68 points or 0 6 percent to 19 792 53 the S P 500 lost 18 44 points or 0 81 percent to 2 253 28 and the Nasdaq Composite dropped 27 16 points or 0 5 percent to 5 436 67 U S crude prices fell nearly 4 percent the most since mid July on renewed concerns about an oil glut sparked by rising U S crude inventories in storage The U S dollar strengthened across the board its index hitting the highest level in nearly 14 years further weighing on oil and other commodities priced in the U S currency Exxon Mobil NYSE XOM declined 2 2 percent and was the largest drag on the S P 500 About 8 49 billion shares changed hands in U S exchanges above the 7 3 billion daily average over the last 20 sessions Declining issues outnumbered advancing ones on the NYSE by a 4 12 to 1 ratio on Nasdaq a 2 74 to 1 ratio favored decliners The S P 500 posted 30 new 52 week highs and 1 new low the Nasdaq Composite recorded 110 new highs and 51 new lows |
XOM | Tillerson to hand over reins to Exxon s president Woods | By Liz Hampton and Swetha Gopinath Reuters Exxon Mobil Corp N XOM said on Wednesday its president Darren Woods will become chief executive and chairman in January following the retirement of Rex Tillerson who is U S President elect Donald Trump s choice for secretary of state Tillerson 64 will retire at the end of the year and Woods 51 will take over effective Jan 1 Exxon the world s largest publicly traded oil company said Woods who was named president and elected to the board in January 2015 was widely expected to become the top executive after Tillerson s retirement next year when he turns 65 the mandatory retirement age for the company Tillerson s nomination as secretary of state speeds up his retirement timeline due to the significant requirements associated with the confirmation process Exxon said in a statement Woods joined Exxon in 1992 and has held various senior positions at the company Unlike Tillerson who rose through the ranks in exploration and production Woods background is in the company s chemicals and refining businesses He was elected as president of Exxon Mobil Refining Supply in 2012 The appointment of a 24 year veteran to run the company is not likely to shake up Exxon s strategy which has always emphasized long term planning The appointment also provides continuity at a time when oil companies are emerging from a two and a half year rout in oil prices that saw profits and capital spending slashed Broadly speaking Exxon s strategy is pretty well locked in said Pavel Molchanov an energy analyst with Raymond James Associates in Houston It would have been locked in no matter who was CEO Some of the biggest challenges Woods will face is coping with low crude prices and geopolitics including U S sanctions against Russia where Exxon has a joint venture with state oil firm Rosneft said Fadel Gheit Managing Director and Senior Energy Strategist with Oppenheimer Co Inc Just because Darren Woods came from refining and chemicals doesn t mean that he s not familiar with the rest of the company s business said Gheit Trump formally named Tillerson on Tuesday as his nominee to serve as secretary of state He could face a rocky confirmation process given concerns among both Democrats and Republicans about his ties to Russia With Tillerson s retirement Exxon s board will have 12 directors Tillerson earned about 24 3 million in 2016 He has a net worth of 150 million plus a 70 million pension plan
Exxon s shares were down about 1 7 percent at 91 in line with the broader energy sector which fell due to lower crude oil prices |
XOM | Trump endorses Romney niece Ronna Romney McDaniel for RNC chair | By Steve Holland NEW YORK Reuters U S President elect Donald Trump on Wednesday endorsed a niece of former critic Mitt Romney to be the next chair of the Republican National Committee as he moved to put his stamp on the party leadership The RNC named Michigan Republican Party chair Ronna Romney McDaniel as its deputy chair and Trump said he looked forward to her taking over the party leadership Trump s incoming White House chief of staff Reince Priebus will leave the RNC chairmanship when Trump takes office on Jan 20 I m excited to have a highly effective leader in Ronna McDaniel as RNC deputy chair and I look forward to her serving as the party s chairman in 2017 Trump said in a statement Ronna has been extremely loyal to our movement and her efforts were critical to our tremendous victory in Michigan and I know she will bring the same passion to the Republican National Committee he added The RNC s 168 elected members will convene in January to elect their next chairman and Trump s endorsement of McDaniel will likely carry enough weight to get her elected McDaniel s profile rose in Trump s view when she helped him win Michigan in the Nov 8 election The state had not voted Republican in a presidential election since 1988 and was critical to Trump s victory over Democrat Hillary Clinton Her selection came two days after Trump passed over Mitt Romney to be his secretary of state instead choosing Exxon Mobil Corp NYSE XOM Chief Executive Rex Tillerson Trump and Romney have gotten past their frictions during the Republican presidential nominating battle when the 2012 Republican nominee was critical of Trump s candidacy Bob Paduchik a veteran Republican operative in Ohio who was Trump s campaign manager in that state was named deputy co chair of the RNC Trump s victory in Ohio was also crucial to his victory |
XOM | Climate scientists adjust as Trump builds team of oil allies | By Peter Henderson SAN FRANCISCO Reuters Climate scientists worried that President elect Donald Trump will slash their budgets and sideline their research are entering survival mode trimming the words climate change from study proposals emphasizing business applications of their work and safeguarding data that shows global warming is real The early reactions gathered by Reuters in more than a dozen interviews may foretell a broader shift in the U S climate science community which had enjoyed solid political and financial support under President Barack Obama but could be isolated under a new administration skeptical of climate change and committed to expanding oil drilling and coal mining I think it is maybe really necessary to refocus what you are doing and how you are labeling it said Andreas Prein a scientist at the federally funded National Center for Atmospheric Research who previously had changed the term climate change in a project for the oil industry and expects such linguistic twists to proliferate Trump has questioned whether climate change exists and has raised the possibility of withdrawing U S support for a global accord to reduce carbon dioxide emissions which an overwhelming majority of scientists believe is driving sea level rise droughts and more frequent violent storms Trump is also preparing to nominate cabinet members with close oil industry ties including Exxon Mobil NYSE XOM CEO Rex Tillerson as secretary of state and former Texas Governor Rick Perry as energy secretary A member of the transition team further raised concerns among scientists this month by sending a questionnaire to the Department of Energy seeking the names of researchers there who worked on climate change issues a move Trump s team later disavowed Federal funding for climate change research technology and international assistance hit 11 6 billion in 2014 from 2 4 billion in 1993 according to the U S Government Accountability Office While Trump has not explicitly said he would cut such funding one of his advisers told The Guardian newspaper last month that climate research at NASA would be eliminated A Trump transition team official did not respond to repeated requests for comment DATAREFUGE Prein at National Center for Atmospheric Research said he had replaced the politically charged term climate change with global change in a project he submitted for the oil industry He said that regardless of how it is labeled interest in climate research would likely endure given the importance of extreme weather forecasting to a broad array of industries like insurance and energy However he was concerned the longer term work crucial to understanding the scope of global warming could lose critical support Climate scientist Ben Sanderson also at NCAR told Reuters he is applying to renew funding for assessing uncertainty in climate change Now the proposal would have to be defensible without referring to climate change explicitly so to talk about weather risks in general he said Tracey Holloway an air quality scientist at the University of Wisconsin said she believed simple word changes sometimes could help scientists avoid trouble Using the term weather instead of climate change for example could work for studies that deal with a short term time scale she said But Eric Holthaus a meteorologist who writes for online magazine Slate has taken efforts to protect scientists and their work a step further He spearhead an effort with the support of the University of Pennsylvania and the University of Toronto to let scientists move their data onto publicly available non government servers The project called DataRefuge is intended to eliminate the chances of political interference with the data he said The signals from the Trump transition team on climate change have also put members of Obama s outgoing administration on edge Current Interior Secretary Sally Jewell told scientists at a conference in San Francisco this week they must confront climate change deniers and speak up if Trump tries to sideline them White House spokesman Josh Earnest later said in a press briefing he believed the concerns of the scientific community about Trump were legitimate If the incoming administration determines that they want to base their policy on something other than science it looks like they re going to get at least four years to try that out and we ll have an opportunity to see how it works he said
Other scientists were dealing with the stress of a new administration using humor University of South Florida glaciologist Jason Gulley said his team had a list of joke projects for science under Trump How could we weaponize glaciers he asked and what is the best real estate currently hidden under Greenland ice sheets |
XOM | Putin turned Russia election hacks in Trump s favor U S officials | WASHINGTON Reuters Russian President Vladimir Putin supervised his intelligence agencies hacking of the U S presidential election and turned it from a general attempt to discredit American democracy to an effort to help Donald Trump three U S officials said on Thursday U S intelligence agencies conclusion that Russia tried to influence the election by hacking people and institutions including Democratic Party bodies has angered President elect Trump who says he won the Nov 8 vote fairly Russian officials have denied accusations of interference in the U S election Separately a senior White House official said on Thursday that Putin was likely to have been aware of the cyber attacks but he fell short of accusing the Russian president I don t think things happen in the Russian government of this consequence without Vladimir Putin knowing about it Ben Rhodes the White House s deputy national security adviser told MSNBC When you re talking about a significant cyber intrusion like this we re talking about the highest levels of government The U S officials who have knowledge of intelligence information on the matter said on the condition of anonymity that the hacking of U S political groups and figures had a more general focus at first This began merely as an effort to show that American democracy is no more credible than Putin s version is one of the officials said It gradually evolved from that to publicizing Hillary Clinton s shortcomings and ignoring the products of hacking Republican institutions which the Russians also did the official said By the fall the official said it became an effort to help Trump s campaign because Putin believed he would be much friendlier to Russia especially on the matter of economic sanctions than Democratic rival Clinton Democratic President Barack Obama said in an interview with National Public Radio that the United States will take action against Russia I think there is no doubt that when any foreign government tries to impact the integrity of our elections we need to take action and we will he said according to excerpts of the Thursday interview released by NPR At a time and a place of our own choosing Some of it may be explicit and publicized some of it may not be Mr Putin is well aware of my feelings about this because I spoke to him directly about it Obama said NBC reported earlier that U S intelligence officials have a high level of confidence Putin was personally involved in the Russian cyber campaign against the United States Hacked emails of Democratic operatives and Clinton aides were leaked during the presidential campaign and at times dominated the news agenda The U S officials said Russia also hacked Republicans but did little to nothing with the information they found PUTIN ROLE Russian Foreign Minister Sergei Lavrov told state TV channel Rossiya 24 that he was dumbstruck by the NBC report of Putin s alleged involvement I think this is just silly and the futility of the attempt to convince somebody of this is absolutely obvious he said Trump who takes office on Jan 20 has brushed off reports of Russian hacking of U S political institutions If Russia or some other entity was hacking why did the White House wait so long to act Why did they only complain after Hillary lost Trump wrote in a post on Twitter on Thursday In fact the U S government did formally accuse Russia of a campaign of cyber attacks against U S political organizations in October one month ahead of the election Obama last week ordered a review by the U S intelligence agencies about foreign interference in the 2016 election Asked on Thursday about the hacks Secretary of State John Kerry described how Obama had been considering the evidence ahead of the October announcement The president made the decision based on the input that was carefully carefully vetted by the intelligence community that he did have an obligation to go out to the country and give a warning And he did so Kerry said at a news briefing The three U S officials who spoke to Reuters said the fact that Putin oversaw a hacking operation was not surprising and is standard operating procedure in Russia If anything given his background as a KGB officer Putin has a much tighter grip on all Russian intelligence operations civilian and military foreign and domestic than any democratic leader does one official said The reports of Russian hacking have raised concerns among both political parties in Congress with top Republicans breaking with Trump to call for closer scrutiny
Some Republican lawmakers have also questioned Trump s pick for Secretary of State Exxon Mobil Corp NYSE XOM Chief Executive Rex Tillerson who has close business ties to the Russian government |
XOM | Obama points finger at Putin for hacks during U S election | By Roberta Rampton and Jeff Mason WASHINGTON Reuters President Barack Obama on Friday strongly suggested that Russian President Vladimir Putin personally authorized the computer hacks of Democratic Party emails that American intelligence officials say were aimed at helping Republican Donald Trump win the Nov 8 election But with only a month left in office during a somber press conference before leaving for a family holiday in Hawaii Obama spoke despairingly about the nasty state of U S politics saying the chasm between Democrats and Republicans has made it possible for Russia to cause mischief Obama said he has great confidence in intelligence reports he has seen showing that Russians hacked into emails belonging to the Democratic National Committee and to John Podesta who was campaign chairman for Democratic presidential candidate Hillary Clinton The leaked emails revealed details of paid speeches Clinton gave to Wall Street party infighting and comments from top aides to Clinton who were shocked about the extent of her use of a private server to send emails while secretary of state The leaks led to embarrassing media coverage and prompted some party officials to resign Obama who campaigned vigorously for Clinton said she was treated unfairly and found the media coverage of her troubling This happened at the highest levels of the Russian government Obama said when asked whether Putin was personally involved in the hacks He added that not much happens in Russia without Vladimir Putin Obama said he warned Putin in September to stop meddling in American political campaigns telling his Russian counterpart to cut it out during a face to face encounter in China at a Group of 20 meeting Obama said he did not believe that U S electronic voting systems were tampered with Obama however stopped short of directly blaming Putin and said he also wanted to give U S intelligence officials more time to produce a report that is due before he leaves office on Jan 20 and Trump is sworn in as his successor RETALIATION FOR CYBER ATTACKS Obama called Russia a smaller and weaker country than the United States that does not produce anything that others want to buy except oil and gas and arms The comments underscored what Obama called the sadly deteriorated relationship between Washington and Moscow which are also at odds over Russia s role in Syria s civil war and its aggressive actions in Ukraine Russia has denied U S accusations that it was behind the hacks Two senior government officials told Reuters that the Federal Bureau of Investigation backs the CIA s view that Russia indeed intervened to help Trump win the presidential election Trump has maintained that he won the election fairly and has bristled at suggestions that Moscow influenced the outcome But at one point during the heated presidential campaign he publicly encouraged Russia to hack Clinton s emails Trump spoke glowingly in the campaign about Putin and since winning the election he has named top aides who have ties to Russia including his nominee for secretary of state Exxon Mobil Corp NYSE XOM Chief Executive Rex Tillerson Obama left open the door to U S retaliation against Russia to discourage further cyber attacks countermeasures that may be up to Trump to implement Obama said he has had cordial discussions with Trump since the election and has stressed that he would do everything he can to ensure a smooth transition But the outgoing president also criticized Trump s fellow Republicans broadly Referencing polls showing that more than one third of Republicans approve of Putin who used to lead the KGB spy agency Obama said that conservative icon Ronald Reagan would roll over in his grave In some cases you have voters and elected officials who have more confidence and faith in a foreign adversary than they have in their neighbors Obama said CHINA AND SYRIA Adding to the gloomy tone of Obama s remarks he addressed two other difficult foreign policy issues that will outlast his time in the White House Obama warned about the economic and geopolitical consequences of any breakdown in the U S China relationship and said Trump should think carefully about the diplomatic repercussions if he decides to upend longstanding U S diplomatic norms Trump angered China earlier this month when he took a congratulatory phone call from Taiwan s president Tsai Ing wen the first call of its kind since 1979 when President Jimmy Carter acknowledged Taiwan as part of one China Obama also condemned attacks on Syrian civilians trying to flee the city of Aleppo blaming President Bashar al Assad and his allies in Russia and Iran for atrocities Obama defended his decision to keep U S troops out of Syria and avoid military intervention although he acknowledged the protracted anguish has weighed on him
Everything else was tempting because we wanted to do something and it sounded like the right thing to do but it was going to be impossible to do this on the cheap he said |
CSCO | What s In Store For Pure Storage PSTG In Q3 Earnings | Enterprise data storage firm Pure Storage Inc NYSE PSTG is scheduled to report third quarter fiscal 2017 ended Oct 2016 results after the market closes on Nov 30 In the last reported quarter earnings beat the Zacks Consensus Estimate by 8 8 Over the trailing four quarters the company missed earnings estimates twice with an average negative earnings surprise of 5 01
Let s see how things are shaping up for this announcement
Key Factors in the Third Quarter
During the quarter Pure Storage enhanced its FlashStack Converged Infrastructure Solution by collaborating with Cisco Systems NASDAQ CSCO This move facilitates easy deployment expansion and maintenance of the solution for FlashStack customers Pure Storage and Cisco have a number of collaborations for various technologies
While the FlashArray product line addresses structured workloads FlashBlade has been designed to tackle unstructured workloads Such collaborations augur well for both the companies but are likely to have a minimal impact on the to be reported quarter s earnings
The company has also announced the availability of petabyte scale storage utilized for mission critical cloud IT the next generation of FlashArray m This will give its customers a wider range of products to choose from and will enhance the company s sales
The data storage industry is touted as one of the hi tech industries to watch out for in the coming years and is reportedly on the cusp of a revolutionary change Storage systems based entirely on flash chips similar to the ones used in smartphones are expected to ultimately replace high performance disk drive systems With cutting edge flash storage technology that is comparatively less expensive Pure Storage is rapidly gaining traction and is likely to record healthy top and bottom line growth in the to be reported quarter
The company focuses on research and development primarily upgrading its existing products while also developing new ones These upgradations and innovations however come at a high cost Such costs can be a drag on the company s income in the to be reported quarter PURE STORAGE Price and EPS Surprise
Earnings Whispers
Our proven model does not conclusively show that Pure Storage will beat earnings estimates in this quarter This is because a stock needs to have both a positive and a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold for this to happen This is not the case here as you will see below
Zacks ESP Earnings ESP which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate is pegged at 0 00
Zacks Rank Pure Storage has a Zacks Rank 4 Sell
As it is we caution against stocks with Zacks Ranks 4 or 5 Sell rated stocks going into the earnings announcement especially when the company is seeing negative estimate revisions
Stocks to Consider
Here are a couple of companies which per our model have the right combination of elements to post an earnings beat this quarter
Golar LNG Ltd NASDAQ GLNG has an Earnings ESP of 7 14 and Zacks Rank 3
PVH Corp NYSE PVH has an Earnings ESP of 0 42 and Zacks Rank 2 You can see
Zacks Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website how would you like to follow all Zacks private buys and sells in real time Our experts cover all kinds of trades from value to momentum from stocks under 10 to ETF and option moves from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises You can even look inside exclusive portfolios that are normally closed to new investors Starting today for the next month you can have unrestricted access |
XOM | ExxonMobil XOM Q2 Earnings Revenues Miss | Irving TX based ExxonMobil Corporation NYSE XOM is the world s largest publicly traded oil company engaged in oil and natural gas exploration and production petroleum products refining and marketing chemicals manufacture and other energy related businesses The company divides its operations into three segments Upstream Downstream and Chemicals Currently ExxonMobil has a Zacks Rank 2 Buy but that could change following its second quarter 2016 earnings report which has just released Coming to earnings surprise history the company has a track record of delivering positive earnings surprises It has beaten estimates in three of the last four quarters at an average rate of 15 46 EXXON MOBIL CRP Price and EPS Surprise We have highlighted some of the key quarterly details from the just released announcement below Earnings ExxonMobil misses on earnings Earnings per share came in at 41 cents below the Zacks Consensus Estimate of 64 cents Revenue Revenues below expectations Revenues of 57 694 million were lower than the Zacks Consensus Estimate of 59 834 million Key Stats Production averaged 3 957 million barrels of oil equivalent per day MMBOE d down 0 6 year over year Liquid production increased 1 7 year over year to 2 330 million barrels per day Natural gas production was 9 762 MCF d millions of cubic feet per day down 3 6 from the year ago period ExxonMobil s refinery throughput averaged 4 2 million barrels per day MMBPD down 4 1 from the year earlier level
Check back later for our full write up on this ExxonMobil s earnings report later |
XOM | ExxonMobil XOM Misses Q2 Earnings Revenue Estimates | ExxonMobil Corporation NYSE XOM posted second quarter 2016 earnings of 41 cents per share widely missing the Zacks Consensus Estimate of 64 cents The bottom line also deteriorated from 1 00 per share in the year ago quarter The impact of sharply lower commodity prices and weaker refining margins was partly offset by strong Chemical results Total revenue in the quarter decreased to 57 694 million from 74 113 million in the year ago quarter The top line also came in below the Zacks Consensus Estimate of 59 834 million Operational PerformanceUpstream Quarterly earnings for the segment declined 1 7 billion from the second quarter of 2015 to 294 million Lower liquids and gas realizations affected earnings by 2 2 billion However sales mix effects increased earnings by 50 million Production averaged 3 957 million barrels of oil equivalent per day MMBOE d down 0 6 year over year Liquids production totaled 2 3 million barrels per day up 39 000 barrels per day Project ramp up was partly offset by field decline and downtime mainly resulting from the Canadian wildfires Natural gas production was 9 8 billion cubic feet per day down 366 million cubic feet per day from the prior year period Downstream The segment recorded profits of 825 million down 681 million from the second quarter of 2015 Weaker margins decreased earnings by 850 million Volume and mix effects increased earnings by 130 million ExxonMobil s refinery throughput averaged 4 2 million barrels per day MMBPD down 4 1 from the year earlier level Chemical This unit contributed approximately 1 2 billion which is 29 million lower than the second quarter of 2015 Improved margins increased earnings by 150 million Favorable volume and mix effects increased earnings by 70 million Other items decreased earnings by 250 million due to the absence of asset management gains in the U S partly offset by lower expenses EXXON MOBIL CRP Price Consensus and EPS Surprise FinancialsDuring the quarter ExxonMobil generated cash flow from operations and asset sales of 5 5 billion The company returned 3 1 billion to shareholders through dividends Capital spending decreased 38 year over year to 5 2 billion Zacks RankExxonMobil currently has a Zacks Rank 2 Buy Other players from the energy sector that can be considered include Vanguard Natural Resources LLC NASDAQ VNR QEP Resources Inc NYSE QEP and McDermott International Inc NYSE MDR Each of these stocks sports a Zacks Rank 1 Strong Buy |
PCG | PG E tumbles another 10 after S P cuts credit rating to junk | PG E PCG 9 9 shares continue to plunge in early trading after S P downgraded the utility s credit rating to junk with a negative outlook in the wake of massive claims stemming from the deadly California wildfires S P cut the rating on PG E and its Pacific Power Gas unit to B from BBB the lowest tier of investment grade ratings citing political and regulatory pressure and uncertainty over its potential liabilities The ratings agency also expects PG E s capital access may be limited to secured debt issuance restricting its financing options due to increased credit risks and media speculation on a potential bankruptcy Yesterday PG E shares plummeted more than 22 and its largest bond a 3B note due in March 2034 with a 6 05 coupon fell to a record low bid price of 0 915 on the dollar while its yield rose to nearly 7 Now read |
PCG | Judge proposes PG E power restrictions for next California fire season | SAN FRANCISCO Reuters A U S judge on Wednesday issued a proposed order to restrict utility PG E N PCG from using power lines deemed to be unsafe during high winds in the 2019 California fire season according to a court filing U S District Judge William Alsup in San Francisco also proposed that PG E be required to re inspect its grid and remove or trim all trees that could fall onto its power lines
The judge is overseeing conditions of PG E s probation following a 2010 gas pipeline explosion and ordered the company to respond to his proposed order by Jan 23 |
PCG | Moody s lowers PG E s credit rating to junk joins SP | Reuters Moody s on Thursday joined S P in lowering PG E Corp s N PCG credit rating deeper into junk territory citing a challenging environment for the California power provider as it faces billions of dollars in liabilities related to wildfires Moody s which cut PG E s rating to B2 from Baa3 said access to capital has become more uncertain for the company The downgrade followed a Reuters report on Friday citing sources that the utility company was exploring filing for bankruptcy protection Moody s also downgraded its ratings of PG E unit Pacific Gas Electric Co to Ba3 from Baa2 The company PG E is increasingly reliant on extraordinary intervention by legislators and regulators which may not occur soon enough or be of sufficient magnitude to address these adverse developments Jeff Cassella Moody s vice president senior credit officer said in a statement S P cut the rating on PG E and its Pacific Power Gas Co unit on Monday to B from BBB the lowest tier of so called investment grade ratings The wildfire which killed at least 86 people broke out on the morning of Nov 8 near the mountain community of Paradise It is said to be one of the most destructive wildfires in California s history
Moody s said it would continue to look for signs of legislative and regulatory support for PG E as the company works through various investigative legal and regulatory processes |
PCG | Are Options Traders Betting On A Big Move In PG E Corporation PCG Stock | Investors in PG E Corporation NYSE PCG need to pay close attention to the stock based on moves in the options market lately That is because the Aug 23 2019 16 Call had some of the highest implied volatility of all equity options today What is Implied Volatility Implied volatility shows how much movement the market is expecting in the future Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other It could also mean there is an event coming up soon that may cause a big rally or a huge sell off However implied volatility is only one piece of the puzzle when putting together an options trading strategy What do the Analysts Think Clearly options traders are pricing in a big move for PG E Corporation shares but what is the fundamental picture for the company Currently PG E Corporation is a Zacks Rank 3 Hold in the Utility Electric Power industry that ranks in the Bottom 40 of our Zacks Industry Rank Over the last 60 days no analysts have increased their earnings estimates for the current quarter while two have dropped their estimates The net effect has taken our Zacks Consensus Estimate for the current quarter from 1 03 per share to 93 cents in that period Given the way analysts feel about PG E Corporation right now this huge implied volatility could mean there s a trade developing Oftentimes options traders look for options with high levels of implied volatility to sell premium This is a strategy many seasoned traders use because it captures decay At expiration the hope for these traders is that the underlying stock does not move as much as originally expected Looking to Trade Options Check out the simple yet high powered approach that Zacks Executive VP Kevin Matras has used to close recent double and triple digit winners In addition to impressive profit potential these trades can actually reduce your risk |
PCG | Why Is PG E PCG Down 45 Since Last Earnings Report | A month has gone by since the last earnings report for PG E PCG Shares have lost about 45 in that time frame underperforming the S P 500
Will the recent negative trend continue leading up to its next earnings release or is PG E due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important drivers PG E Corporation Q2 Earnings Beat Revenues Down Y YPG E Corporation reported adjusted operating earnings per share of 1 10 in second quarter 2019 which surpassed the Zacks Consensus Estimate of 97 cents by 13 4 The bottom line however declined 5 2 from the year ago quarter s figure Including one time items the company incurred a GAAP loss of 4 83 per share compared with a loss of 1 91 in the prior year quarter Revenue Update PG E Corp s total revenues of 3 943 million missed the Zacks Consensus Estimate of 4 299 million by 8 3 The top line also declined 6 9 from the year ago quarter While electric revenues decreased 11 from the prior year quarter s figure natural gas revenues improved 8 1 year over year Operational Highlights Operating expenses in the reported quarter totaled 7 583 million which surged 33 from 5 699 million in second quarter 2018 The increase was due to higher cost of natural gas elevated operating and maintenance expenses higher wildfire related claims and escalated depreciation amortization and decommissioning expenses The company incurred operating losses of 3 638 million compared with operating losses of 1 465 million in the previous year s second quarter Interest expenses in second quarter 2019 summed 60 million compared with 222 million in the year ago period GuidancePG E Corp has not provided guidance for 2019 GAAP earnings and adjusted earnings from operations due to the continuing uncertainty related to the 2018 Camp Fire the 2017 Northern California wildfires the Chapter 11 proceedings and legislative and regulatory reforms
How Have Estimates Been Moving Since Then
In the past month investors have witnessed an upward trend in estimates review
VGM Scores
Currently PG E has a subpar Growth Score of D however its Momentum Score is doing a lot better with an A Following the exact same course the stock was allocated a grade of A on the value side putting it in the top quintile for this investment strategy
Overall the stock has an aggregate VGM Score of B If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision indicates a downward shift Notably PG E has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
PCG | Will PG E PCG Beat Estimates Again In Its Next Earnings Report | Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report PG E PCG which belongs to the Zacks Utility Electric Power industry could be a great candidate to consider
This utility holding company has an established record of topping earnings estimates especially when looking at the previous two reports The company boasts an average surprise for the past two quarters of 14 48
For the most recent quarter PG E was expected to post earnings of 0 97 per share but it reported 1 10 per share instead representing a surprise of 13 40 For the previous quarter the consensus estimate was 0 90 per share while it actually produced 1 04 per share a surprise of 15 56
Price and EPS Surprise
Thanks in part to this history there has been a favorable change in earnings estimates for PG E lately In fact the Zacks Earnings ESP Expected Surprise Prediction for the stock is positive which is a great indicator of an earnings beat particularly when combined with its solid Zacks Rank
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank 3 Hold or better produce a positive surprise nearly 70 of the time In other words if you have 10 stocks with this combination the number of stocks that beat the consensus estimate could be as high as seven
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
PG E currently has an Earnings ESP of 3 03 which suggests that analysts have recently become bullish on the company s earnings prospects This positive Earnings ESP when combined with the stock s Zacks Rank 3 Hold indicates that another beat is possibly around the corner
Investors should note however that a negative Earnings ESP reading is not indicative of an earnings miss but a negative value does reduce the predictive power of this metric
Many companies end up beating the consensus EPS estimate though this is not the only reason why their shares gain Additionally some stocks may remain stable even if they end up missing the consensus estimate
Because of this it s really important to check a company s Earnings ESP ahead of its quarterly release to increase the odds of success Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported |
XOM | Trump to name Exxon Mobil CEO Tillerson as U S secretary of state Fox News | Reuters U S President elect Donald Trump will name Exxon Mobil Corp NYSE XOM Chief Executive Officer Rex Tillerson as his choice for secretary of state Fox News reported on Monday citing unnamed sources |
XOM | Trump taps Exxon CEO Tillerson as top U S diplomat | By Steve Holland WASHINGTON Reuters U S President elect Donald Trump announced Exxon Mobil Corp NYSE XOM Chief Executive Officer Rex Tillerson as his choice for secretary of state on Tuesday praising him as a successful international dealmaker who leads a global operation Tillerson s experience in diplomacy stems from making deals with foreign countries for Exxon the world s largest energy company although questions have been raised about his relations with Russia He will be a forceful and clear eyed advocate for America s vital national interests and help reverse years of misguided foreign policies and actions that have weakened America s security and standing in the world Trump said in a statement Tillerson has been chief executive of Exxon Mobil since 2006 and like Trump has never held public office He said he shared the president elect s vision for restoring the credibility of the United States foreign relations and advancing our country s national security Trump picked Tillerson 64 after the Texan was backed by several Republican establishment figures including former Secretary of State James Baker former Secretary of State Condoleezza Rice and former Defense Secretary Robert Gates a senior transition official said Rice and Gates who have worked for Exxon as consultants both issued statements of support on Tuesday Their support is seen as crucial to helping Tillerson get past a possibly contentious Senate confirmation battle likely to focus on his relationship with Russian President Vladimir Putin Senate Foreign Relations Committee Chairman Bob Corker who also was under consideration for the secretary of state job said in a statement that he would hold a nomination hearing in early January He called Tillerson a very impressive individual with an extraordinary working knowledge of the world RUSSIAN TIES Lawmakers from both major parties raised concerns about the oilman s relationship with Moscow Republican U S Senator Marco Rubio in a statement said he had serious concerns about Tillerson s nomination In 2013 Putin bestowed a Russian state honor the Order of Friendship on Tillerson citing his work strengthening cooperation in the energy sector Mr Tillerson s cozy ties to Vladimir Putin and Russia would represent an untenable conflict at the State Department Representative Eliot Engel the ranking Democrat on the House Committee on Foreign Affairs said in a statement Trump is confident that Tillerson can get past questions about his ties to Russia the transition official said His relationships with leaders all over the world are second to none Trump s statement said There also are concerns among lawmakers about former U N Ambassador John Bolton who has been mentioned as a possible No 2 State Department official and who has voiced hawkish views on Iraq and Iran Republicans and Democrats said they would ask Tillerson who has met Putin several times about his contacts with Russia He won fresh praise from Moscow on Monday Senator John McCain a leading foreign policy voice and the 2008 Republican candidate for president told Reuters I have concerns It s very well known that he has a very close relationship with Vladimir Putin There has been controversy over the role alleged Russian cyber hacking may have had on the outcome of the Nov 8 presidential election in which Trump defeated Democrat Hillary Clinton The business community welcomed Trump s choice of Tillerson We are pleased that Rex will bring a business perspective to the State Department the National Association of Manufacturers said BUSINESS INTERESTS While busily filling out his Cabinet Trump is seeking to answer questions about how he will separate himself from his far flung business empire before taking office on Jan 20 He had planned a news conference on Thursday to lay out the details but delayed it until Tuesday due to what aides said was the crush of picking people to serve in his administration In a series of late night tweets on Monday Trump said he would be leaving his business before his Jan 20 inauguration so he can focus full time on the presidency and that he would leave his two sons Donald Trump Jr and Eric Trump to manage it He did not mention his daughter Ivanka who has been a central player in his business affairs as well as his campaign and who is said to be considering a move to Washington to help her father No new deals will be done during my term s in office Trump said He said he would hold a news conference in the near future to discuss the business Cabinet picks and all other topics of interest Busy times Reince Priebus the Republican National Committee chairman who will serve as Trump s chief of staff come January said in several television interviews on Tuesday that efforts were underway to sort out Trump s complicated businesses It takes a lot of time he told MSNBC We know this is something that we ve got to deal with Meanwhile Trump has continued to build his administration A source close to the transition said Trump had chosen former Texas Governor Rick Perry as his nominee for energy secretary with an announcement expected soon Perry met Trump on Monday at Trump Tower in New York In choosing Tillerson Trump passed over 2012 Republican presidential nominee Mitt Romney who had famously criticized the president elect during the campaign this year
It was an honor to have been considered for secretary of state of our great country Romney said in a Facebook NASDAQ FB posting on Monday night |
XOM | Trump picks former Texas Governor Perry as energy secretary | By Steve Holland WASHINGTON Reuters Donald Trump has chosen former Texas Governor Rick Perry to head the U S Department of Energy a source close to the president elect said putting him in charge of an agency he proposed eliminating during his bid for the 2012 Republican presidential nomination The choice of Perry adds to the list of oil drilling advocates skeptical about climate change who Trump has picked for senior positions in his Cabinet worrying environmentalists but cheering an industry eager for expansion The selection of Perry who also had been mentioned as a candidate for agriculture secretary was disclosed on Monday night after Perry met the president elect at Trump Tower in New York The department is responsible for U S energy policy and oversees the nation s nuclear weapons program Perry has advocated lighter regulation on the fossil fuel industry and has called the science around climate change unsettled Perry s proposal to get rid of the Energy Department caused what has become known as his oops moment during a November 2011 Republican presidential candidate debate when he could not remember all of the three Cabinet level departments he wanted to eliminate After mentioning the departments of Commerce and Education he said I can t The third one I can t Sorry Oops A few minutes later in the debate Perry said with a laugh By the way that was the Department of Energy I was reaching for a while ago Perry who also briefly ran in the 2016 presidential race would have to be confirmed by the Senate to head the Energy Department Perry served as governor of Texas a leading oil producing state from 2000 when he succeeded President George W Bush until 2015 In his unsuccessful presidential runs he touted his record of job creation in the second most populous state PAST CRITICISM Perry was a fierce critic of Trump last year before dropping out of the race calling him a cancer on conservatism who offered a toxic mix of demagoguery and mean spiritedness and nonsense Trump also had harsh things to say about Perry during the campaign even belittling his eyeglasses by saying He put on glasses so people will think he s smart Once Trump secured the nomination Perry endorsed him as the people s choice There were indications of a possible rocky handover for the Energy Department after Trump transition officials asked the agency for the names of employees who have worked on climate change issues Department spokesman Eben Burnham Snyder said on Tuesday the department will not comply and that the request had left many in our workforce unsettled Perry s selection is another indication that the incoming Trump administration may be friendly toward the fossil fuel industry He is on the board of directors for Energy Transfer Partners the company building the Dakota Access Pipeline in North Dakota that has been stalled by protests by the Standing Rock Sioux tribe and supporters Trump on Tuesday named Rex Tillerson chief executive of oil giant Exxon Mobil Corp NYSE XOM as his choice for secretary of state Trump has settled on U S Representative Cathy McMorris Rodgers a climate change skeptic and an advocate for expanded oil and gas development as interior secretary Trump s choice for the Environmental Protection Agency is Oklahoma Attorney General Scott Pruitt an ardent opponent of President Barack Obama s measures to curb climate change who has sued the EPA to block in a bid to undo a key regulation to curb greenhouse gas emissions mainly from coal fired power plants An overwhelming majority of scientists believe that carbon dioxide emissions from burning oil gas and coal is a significant contributor to global climate change causing sea level rise drought and more frequent violent storms The Energy Department was established by President Jimmy Carter in 1977 after an embargo by oil exporting nations led to shortages in the United States Billionaire environmental activist Tom Steyer said he hoped Perry s nomination would be blocked
Trump no longer has to abolish departments He can dismantle them from within Steyer said It s now up to the Senate to defend our health our economy and our democracy by defeating this nomination |
XOM | After Alaska flop Shell s search for oil moves closer to home | By Ron Bousso LONDON Reuters In the waters off Malaysia Royal Dutch Shell L RDSa is finding gas quickly and cheaply to replenish depleting fields where only a few years ago geologists had lost hope of discovering any new reserves The Anglo Dutch group is combining the latest technology with the wisdom of industry veterans to unlock new oil and gas deposits where it already operates usually within 20 km 12 miles of existing platforms The result has been a string of finds which while modest in size can generate cash rapidly to suit an era of drastically reduced exploration budgets across the energy industry After a costly flop in Alaska Shell has turned away from giant frontier projects focusing instead on exploring closer to home such as in Malaysia where it has been producing oil for more than a century Many of its rivals are following suit With new data new seismic and new brain power you can find extraordinary amount of hydrocarbons for the future Ceri Powell Shell s head of exploration told Reuters Analysts say the industry will still need large discoveries in areas where the risk of failure is greater but the cheaper and easier approach is paying dividends in the short term State of the art technology such as 3 dimensional seismic imaging enabled Shell to unlock new prospects that quickly led to a string of discoveries transforming the region off the Malaysian state of Sarawak into one of its most prolific basins Breaking with decades of traditional drilling techniques which used rudimentary technology Shell combined the use of sonar waves with satellite images and super computers to pinpoint oil and gas deposits beneath layers of salt in rock This has proved so effective that Shell moved from holding only one exploration license in shallow waters off Malaysia in 2013 to nine now searching at greater depths and further offshore than ever Today it is exploring 27 000 square km 10 500 square miles off Sarawak for oil and gas It has made 16 discoveries in the last 28 months that unlocked one billion barrels of oil equivalent Shell and other oil companies including state run Petronas KL PETR now plan to map geologically the entire Malaysian coast Shell like many of its peers including BP L BP and Exxon Mobil N XOM have been forced into such strategies as the chances of finding new and huge reservoirs in hitherto unexplored frontier areas has diminished Per Magnus Nysveen head of analysis at Oslo based consultancy Rystad Energy said the average distance of exploration wells to the closest fields fell from 113 km 70 miles in 2015 to just 29 km in 2016 and is set to drop further next year Hugely expensive and risky frontier projects are often falling from favor due to the sharp decline in global oil prices since mid 2014 which has made energy firms slash their exploration budgets and the new supplies from cheaper sources ranging from U S shale deposits to the Malaysian discoveries Last year Shell angered investors when it wrote down 7 billion after failing to find any oil or gas in the pristine Chukchi sea off Alaska s northwest coast This followed years of complex work and a rig accident that drew heavy criticism from environmental activists The rate of successful exploration has dropped sharply in the last decade with the proportion of projects finding any oil or gas down from around 40 percent to about 30 percent according Andrew Latham vice president of exploration at consultancy Wood Mackenzie Fewer than half of the finds go into commercial production Across the industry exploration budgets have sunk to 40 billion in 2016 from 95 billion two years earlier Shell s spending dropped to less than 2 billion from around 5 billion In the last two years intense focus on new seismic and relooking at the basins that we have in our portfolio already is really paying dividends said Powell a geologist who joined Shell in 1990 and became head of exploration three years ago She is now applying the techniques used in Malaysia to other hubs such as Brunei and Egypt where seismic imaging advanced rigs and super computers are giving them a new lease of life Falling costs in some areas are also helping to stretch the tight exploration budgets The cost of hiring vessels for seismic surveys has dropped around 60 percent from late 2013 to around 140 000 per day according to Shell which is using this to expand and accelerate its seismic plans into 2017 and 2018 DOGMAS It s not only technology that has helped to turn around the fortunes of the exploration business Several times a year Powell brings industry veterans some of them retired together with the new generation of geologists The idea is to combine the experience and instincts of the old school explorers with the younger generation s technological know how to come up with ideas on where to find new reserves and how to unlock them You put them all in one room and they look at the dogmas They think about the wells they would have drilled in 1972 but didn t and why and it has been astonishing In Oman where Shell has been exploring for 60 years this exercise helped to identify six new geological prospects in a week she said These brainstorming sessions have only one rule to concentrate minds no computers are allowed But while drilling closer to home is attractive in the short term it comes at the expense of huge discoveries such as Exxon s Liza field in Guyana and Eni s MI ENI Zohr in Egypt These are crucial for replacing a natural decline of oil and gas reserves that in some reservoirs can reach 10 percent a year Lead times are shorter and the value per oil equivalent is higher but the cons are that discoveries are smaller In general we would expect the largest discoveries to be coming from new plays and new frontiers as has happened in recent years said Latham Wood Mackenzie expects global exploration activity to accelerate in 2017 as oil prices recover RAPID CASH While the Alaskan project failed Shell added huge resources in Brazil Australia Egypt and southeast Asia to its reserves by buying BG Group in February for 54 billion This means it can now allocate around 80 percent of its exploration budget to areas up to only 20 km from existing platforms In some cases such as in Brunei an exploration well can be completed and linked to production within days Those will not necessarily be giant discoveries but will be very efficient and very rapid to get to production and therefore to cash Powell said In the past six years exploration has added 6 5 billion barrels of oil equivalent to Shell s reserves which reached 11 75 billion at the end of 2015 while the time from exploration to production has come down significantly she added Other oil majors have adopted similar strategies BP has begun drilling hundreds of meters below a reservoir produced by the Ravenspurn ST2 platform in the southern North Sea searching for a new gas resource that could transform a basin first exploited 50 years ago and extend the life of infrastructure For Shell the success of the new strategy and the Alaskan failure mean it will not return to frontier areas in the near future but Powell still sees opportunities for big discoveries in the likes of west Africa Namibia South Africa Uruguay eastern Canada For a graphic of oil and gas exploration spending click editing by David Stamp |
XOM | Democrats enlist experts to scour Tillerson s business record | By Patricia Zengerle WASHINGTON Reuters U S Senate Democrats plan to enlist accountants and legal experts to pore through the business records of Exxon Mobil N XOM Chief Executive Rex Tillerson President elect Donald Trump s pick for secretary of state Democratic aides said Tillerson could face a rocky confirmation process given concerns among both Democrats and Republicans about his ties to Russia If Tillerson can overcome the skepticism of Republicans he could win confirmation since their party will control a slim majority in the Senate when Trump takes office on Jan 20 Democrats misgivings about Tillerson go well beyond the worry that he might be too accommodating toward Moscow They see risks of conflicts if the head of the 380 billion oil giant becomes the nation s top diplomat and they want to ensure that his personal wealth and business interests get close scrutiny Aides said Democrats began assembling experts to prepare for Tillerson s confirmation even before his nomination was formally announced on Tuesday We will bring in people who have been through confirmation battles before a Democratic leadership aide said We want to have a very thorough review We are very comfortable with this process taking as long as it needs In many ways Exxon operates its own kind of diplomatic corps dispatching executives to network with government officials in the more than 40 countries in which the company operates The scale and the reach of Exxon Mobil does raise some questions about those relationships and how his experience at the helm of Exxon Mobil will influence his decision making as secretary said Democratic Senator Chris Coons a member of the Senate Foreign Relations Committee which will hold Tillerson s confirmation hearing next month Tillerson 64 is on the New York Times list of the 200 highest paid CEOs having earned some 24 3 million in 2016 He has a net worth of 150 million plus a 70 million pension plan He would likely need to divest his holdings of Exxon stock RUSSIA TIES Democrats are also consulting with foreign affairs experts as they examine his relationships with countries such as Russia Tillerson opposed sanctions imposed on Russia after its annexation of Crimea He has said they are often ineffective Exxon has said the sanctions on Russia could cost it hundreds of millions of dollars or more We are looking at issues like will he need to recuse himself from decisions on sanctions another Democratic aide said Exxon has also come under attack for the financial arrangements of its oil production in Chad where the company s lawyers are negotiating over a 74 billion fine tied to accusations of royalty underpayment Exxon also has development rights in Iraq which is battling Islamic State and Saudi Arabia with its controversial record on human rights and complex relationship with U S ally Israel and Iran whose international nuclear agreement signed by President Barack Obama has been harshly criticized by Trump Mr Tillerson has demonstrated he knows the corporate world and can put his shareholders interests first but can he be a respected secretary of state that puts the national security interests of the American people first asked Senator Ben Cardin the ranking Foreign Relations committee Democrat Tillerson enjoys strong support from Republican leaders but some party members offered more muted reactions Marco Rubio a Republican member of the Foreign Relations panel who ran against Trump for the Republican presidential nomination said he had serious concerns about Tillerson s nomination Even critics said however they were open to the appointment if Tillerson gives satisfactory answers during the confirmation process There are lots of ways that energy and our energy dependence has influenced our foreign policy over decades and hopefully he will bring some insights as a result of that experience Coons said
It is not all bad that he s got 40 years of experience globally in business he added |
XOM | Ukraine foreign minister does not see improved Russia US ties under Trump agency | KIEV Reuters Ukraine s Foreign Minister Pavlo Klimkin does not think relations between Russia and the United States will improve under Donald Trump s administration news agency Interfax Ukraine reported him as saying late on Tuesday The comments follow Trump s choice of Rex Tillerson as his secretary of state a decision welcomed by the Kremlin which said Russian President Vladimir Putin and many other Russian officials have good relations with the Exxon Mobil Corp NYSE XOM boss Klimkin said the United States relationship with Ukraine and Russia in the future would not depend on the secretary of state alone adding that officials in the Republican party and members of Trump s transition team had voiced support for Kiev It is not just up to the secretary of state but up to his whole team who will deal with issues relating to both foreign affairs and national security and global economics he said I do not support the idea that it will be easier for Russia to work with the new administration Some of Trump s campaign comments from appearing to recognize Crimea as part of Russia to contemplating an end to U S sanctions on Russia stoked fears in Kiev that Trump might mend ties with Moscow at Ukraine s expense The United States and the European Union have imposed a range of economic sanctions on Russia as a result of its annexation of Crimea and its actions in eastern Ukraine that are reviewed every six months |
XOM | U N environment chief concerned at climate science skeptics among Trump picks | By Kanupriya Kapoor JAKARTA Reuters Some elite U S politicians denial of the science backing up climate change is worrying the United Nations environment chief said on Wednesday adding that the fight against global warming would continue even without the United States U S President elect Donald Trump has in the past dismissed climate change as a hoax vowing during his campaign to pull the United States out of the Paris Climate Agreement a deal among nearly 200 countries to curb global warming Trump who won the November election on a range of populist promises to deregulate and revive the energy sector has appointed to his cabinet climate change skeptics including oil magnates moves that have angered green groups Erik Solheim executive director of the UN Environment Program said in an interview he was not concerned about oil industry stalwarts in Trump s cabinet because they brought experience in handling major energy projects and negotiations However I am concerned that some elite American politicians deny science You will be in the Middle Ages if you deny science he told Reuters in the Indonesian capital in response to a question about Trump s cabinet picks Trump has appointed at least three cabinet members who have in the past cast doubt on the science behind climate change Oklahoma Attorney General Scott Pruitt who opposed President Barack Obama s measures to fight climate change has been picked to head the Environmental Protection Agency Former Texas governor Rick Perry has been appointed to lead the Energy Department which he once proposed scrapping altogether Rex Tillerson chief executive of Exxon Mobil Corp NYSE XOM will be secretary of state the country s top diplomat The majority of scientists around the world say global warming is causing rising sea levels drought and an increase in storms Solheim said even though Trump s environmental policies remained unclear the battle against climate change would continue If the United States in the worst case were to withdraw from the Paris Agreement we will depend more on China he added China and many others will provide the global leadership we need
Since the election however Trump has said he will keep an open mind about the climate deal and has also met former Vice President Al Gore a leading climate change activist |
PCG | Exclusive California utility PG E explores bankruptcy filing sources | By Liana B Baker Greg Roumeliotis and Mike Spector Reuters California utility company PG E Corp N PCG is exploring filing some or all of its business for bankruptcy protection as it faces billions of dollars in liabilities related to fatal wildfires in 2018 and 2017 people familiar with the matter said on Friday The company is considering the move as a contingency in part because it could soon take a significant financial charge for the fourth quarter of 2018 related to liabilities from the blazes the sources said A bankruptcy filing is not certain the sources said The company could receive financial help through legislation that would let it pass on to customers costs associated with fire liabilities the sources said But that is just a possibility they said so bankruptcy preparations are being made As of Friday PG E was shying away from negotiating so called debtor in possession financing that companies typically line up before a bankruptcy filing to help keep operating while under court protection one source familiar with the matter said A bankruptcy filing is not PG E s preference for addressing liabilities from the catastrophic blazes some of the sources said But the preparations could put pressure on California politicians hoping the company can avoid such an outcome Shares of PG E which has a market capitalization of 12 7 billion dropped 30 percent in after hours trading in New York on Friday on the news PG E s board and management are working diligently to assess the company s potential liabilities as a result of the wildfires and the options for addressing those liabilities We recognize the need to balance the interests of many stakeholders while maintaining safe reliable and affordable services for our customers which is always our top priority the company said in a statement PG E is also exploring selling its gas unit potentially through a court supervised auction during bankruptcy proceedings one of the sources said The sale could also take place outside a bankruptcy process the same source said The company is weighing using proceeds from the unit s sale to address death and injury claims arising from the recent wildfires this source said NPR first reported on the exploration of the gas unit sale earlier on Friday PG E which filed for bankruptcy once before in 2001 said in November it could face significant liability in excess of its insurance coverage if its equipment was found to have caused last year s fires in northern California The Camp Fire broke out on the morning of Nov 8 near the mountain community of Paradise sweeping through the town and killing at least 86 people in the deadliest and most destructive wildfire in state history PG E also faces dozens of lawsuits from owners of homes and businesses that burned during 2017 fires The utility has been wrestling with how best to proceed after two years of destructive fires California policymakers had approved a bill that let utilities pass on to customers some costs related to wildfires according to Moody s But the bill did not cover 2018 fires Filing for bankruptcy would shield PG E from the liabilities giving it time to figure out how to handle the claims The company said on Friday that it was reviewing its structural options and assessing its operations finances management structure and governance It also said it is searching for new directors at its holding company and its utility subsidiary Pacific Gas and Electric Co PG E added that it has formed a special board committee that includes independent experts to advise on wildfire safety best practices Reuters reported last year that the company was working with bankruptcy advisors The utility has borrowed more than 3 billion under credit lines available to it a move companies in financial distress will often make to shore up cash The California Public Utilities Commission last month opened proceedings to consider penalties against the company for falsifying pipeline safety records
PG E also filed for bankruptcy in 2001 during California s energy crisis It had amassed too much debt by buying electricity which it was then not allowed to recoup by increasing rates for its customers It emerged from bankruptcy in 2004 |
PCG | PG E shares and bonds plunge on bankruptcy worries | Reuters PG E Corp s N PCG shares dived more than 22 percent on Monday after sources said the California utility is exploring filing for bankruptcy protection as it fears a massive charge in the fourth quarter related to potential liabilities from wildfires The utility is considering the move for some or all of its businesses Reuters reported on Friday PG E did not respond to a request for comment The company s roughly 18 billion in bonds also fell on Monday with over 80 percent of the issues trading down Its largest bond a 3 billion note due in March 2034 with a coupon of 6 05 percent 694308GE1 fell to a record low bid price of 91 5 cents on the dollar and its yield rose to nearly 7 percent Its yield spread over comparable Treasury debt a measure of the additional compensation investors demand for holding PG E bonds rather than a safer government bond widened to a record 4 3 percentage points It was the most actively traded corporate debt issue on the day according to MarketAxess while a PG E December 2027 bond was the fourth most active Credit ratings for PG E and its Pacific Gas Electric unit were downgraded by the three main ratings agencies in mid November They now sit at one notch above junk bond territory Moody s Investors Service Standard Poor s and Fitch Ratings did not immediately respond to requests for comment on Monday A bankruptcy claim however may not hurt the bonds in the long term PG E s enterprise value a measure of the company s worth that includes debt is 32 billion which would cover the 25 billion to 30 billion in claims from fires in the last two years without impairing the bonds Sources had told Reuters that a bankruptcy filing is not certain and the company could receive financial help through legislation that would let it pass on to customers costs associated with fire liabilities But that is just a possibility they said Without adequate political and regulatory support we cannot rule out a Chapter 11 filing Christopher Turnure analyst at J P Morgan said in a note However Guggenheim Partners analyst Shahriar Pourreza said bankruptcy will not be the best option as PG E is too big an utility in California Legislation is the way forward as it will allow to keep the utility alive and mitigate any negative impact one can get from the bankruptcy Pourreza said The utility said on Friday it is also looking for new directors for its holding company and its unit Pacific Gas and Electric Co
Shares of the company were trading down at 19 01 in early afternoon trading their lowest since mid November |
PCG | Should Value Investors Buy PG E PCG Stock | Here at Zacks our focus is on the proven Zacks Rank system which emphasizes earnings estimates and estimate revisions to find great stocks Nevertheless we are always paying attention to the latest value growth and momentum trends to underscore strong picks
Looking at the history of these trends perhaps none is more beloved than value investing This strategy simply looks to identify companies that are being undervalued by the broader market Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large
Luckily Zacks has developed its own Style Scores system in an effort to find stocks with specific traits Value investors will be interested in the system s Value category Stocks with both A grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now
One stock to keep an eye on is PG E PCG PCG is currently sporting a Zacks Rank of 2 Buy as well as a Value grade of A
Investors will also notice that PCG has a PEG ratio of 1 99 This popular metric is similar to the widely known P E ratio with the difference being that the PEG ratio also takes into account the company s expected earnings growth rate PCG s industry currently sports an average PEG of 2 47 Within the past year PCG s PEG has been as high as 3 54 and as low as 0 46 with a median of 2 08
Investors should also recognize that PCG has a P B ratio of 0 72 Investors use the P B ratio to look at a stock s market value versus its book value which is defined as total assets minus total liabilities This stock s P B looks solid versus its industry s average P B of 1 75 Within the past 52 weeks PCG s P B has been as high as 1 29 and as low as 0 26 with a median of 0 87
These are just a handful of the figures considered in PG E s great Value grade Still they help show that the stock is likely being undervalued at the moment Add this to the strength of its earnings outlook and we can clearly see that PCG is an impressive value stock right now |
PCG | PG E PCG Surges Stock Moves 7 3 Higher | PG E Corporation NYSE PCG was a big mover last session as the company saw its shares rise more than 7 on the day The move came on solid volume too with far more shares changing hands than in a normal session This stock which remained volatile and traded within the range of 17 10 20 97 in the past one month time frame witnessed a sharp increase yesterday The stock gained after the company announced that it has reached agreements for resolving wildfire claims Also it will make payments worth 1 billion to 18 different public entities as part of a Chapter 11 Plan of Reorganization The company has seen one negative estimate revision in the past few weeks while its Zacks Consensus Estimate for the current quarter has also moved lower over the past few weeks suggesting there may be trouble down the road So make sure to keep an eye on this stock going forward to see if this recent move higher can last PG E currently has a Zacks Rank 4 Sell while its is 0 00 Pacific Gas Electric Co Price Investors interested in the Utility Electric Power industry may consider a better ranked stock like Atlantic Power Corporation NYSE AT which carries a Zacks Rank 1 Strong Buy You can see Is PCG going up Or down Predict to see what others think Up or DownWill you retire a millionaire One out of every six people retires a multimillionaire Get smart tips you can do today to become one of them in a new Special Report 7 Things You Can Do Now to Retire a Multimillionaire |
PCG | PG E Has More Downside Risk | Recently I ve come across a positively asymmetric low risk high reward opportunity via buying puts on a utility firm that s recently entered bankruptcy
I m talking about Pacific Gas Electric Co NYSE PCG which is the holding company that owns the California utility firm Pacific Gas Electricity PG E
But first here s some context
Pacific Gas Electric was created in the mid 1800 s and is still the largest power provider in California And one of the largest in the entire country
They provide energy to over five million customers and have many sources of generating power such as wind water solar nuclear conventional
Putting it simply the firm s a massive power provider in one of the largest and wealthiest states in the U S
But fast forward to today and PG E s now bankrupt just filed Chapter 11 in January 2019
Keep in mind that this is the second time they ve entered bankruptcy last time was in 2001 and later resumed operations in 2004
So what led to this
For starters years of mis using shareholder capital Significant debt accumulation And deferred maintenance of equipment put PG E in a very fragile position
And like most fragile things they break once a tipping point is reached
Well that tipping point came in 2018
The Camp Fire which was the deadliest and most destructive forest fire in California history was the event that broke PG E
To put things in perspective this forest fire killed 85 people and destroyed nearly 19 000 homes businesses and commercial buildings
And making matters worse last month May the California Department of Forestry and Fire Protection aka Cal Fire publicly announced that after a very meticulous and thorough investigation it has determined that the Camp Fire event was triggered by the electrical transmission lines owned and operated by PG E
PG E also stated back in February that their equipment was most likely the cause of the Camp Fire
This put PG E directly liable for significant damages caused by their own negligence estimated at 30 plus billion in wildfire liabilities which dwarves the firms 1 5 billion in fire insurance coverage
Therefore ballooning liabilities from last years Camp Fire incident and further potential criminal and civil liabilities pushed the already very leveraged and fragile company into Chapter 11 bankruptcy
There s already been new fires this month in California which have been linked to PG E s falling power lines This indicates that their liabilities will soar even higher
So what now
Well currently PG E stock trades for 24 00 per share a roughly 12 billion market cap
That s because shareholders still believe that after paying liabilities and creditors they will still receive something
For instance back during the 2001 bankruptcy shareholders came out looking very well For those that held from the 2001 bankruptcy until September 2017 made over 700
PG E was able to re pay the 10 billion they owed to creditors via a combination of existing cash and new debt
But what really saved the firm was the de facto bailout from the State of California
In short the state bought PG E s spare electrical power what they didn t sell to citizens at artificially high market prices for about five years
So will this scenario happen this time around
I m doubtful
Actually I believe PG E shares have much more downside compared to any upside potential aka negatively asymmetric i e huge downside limited upside
For starters PG E s assets in my opinion aren t nearly worth as much as the market s expecting
True power companies have the ability to hike utility prices cost of electricity And most are forced to pay for it unless the government steps in
But still PG E has destroyed significant shareholder value and has burned through lots of cash over the last 15 years since coming out of their previous bankruptcy
For instance just over the last decade the firm s generated nearly 9 billion in negative free cash flow
This means that the firm hasn t grown organically And has instead depended on both debt 10 5 billion worth over last 10 years and selling stock 6 billion worth over last 10 years
Thus if PG E hasn t been able to generate any cash flow over the last 10 years and instead binged on debt I don t believe things will change in the future
Keep in mind that the firm has mounting liabilities compared to cash According to the recent PG E filing Mar 2019 the firm has only 3 billion in cash But has 5 billion due in short term liabilities 14 billion in wildfire claims And 69 billion in total liabilities this isn t even counting the additional wildfire claims they owe in excess of 30 billion
Another hit to shareholders is the fact that there are creditors sitting on 8 billion worth of unsecured bonds aka debt that s not backed by any collateral that want to take a chance at reorganizing the company
This means that if the plan s accepted it would raise 30 billion of cash And 18 billion of that would come from selling new shares They also want to rename the company Golden State Power Light Gas Co
This would significantly dilute current shareholders meaning their piece of the corporate pie would be much smaller
So in summary the key takeaway here is that it will take many billions to get PG E whole again
Liabilities such as mounting wildfire claims repaying creditors employee pensions and re investing in outdated infrastructure must be paid
Note that all these must be paid first before shareholders can receive anything i e what s left over
Don t forget that it s already been six months since PG E filed Chapter 11 And they still haven t submitted a plan to reorganize
Now with the 2019 fire season underway in California there could be even more wildfire damage Which is already happening
This means even more claims PG E must pay
So here s the big question will PG E shareholders get anything after they restructure
Who knows
But I believe it will be considerably less than the current share price of 24 per share
Or said another way I believe PG E shareholders own more liabilities than assets
And because of this I m buying long dated way out of the money put options on PCG Since I expect shareholders will be wiped out over the coming year s
As always do your own diligence |
PCG | Earnings Preview PG E PCG Q2 Earnings Expected To Decline | The market expects PG E PCG to deliver a year over year decline in earnings on higher revenues when it reports results for the quarter ended June 2019 This widely known consensus outlook is important in assessing the company s earnings picture but a powerful factor that might influence its near term stock price is how the actual results compare to these estimates
The stock might move higher if these key numbers top expectations in the upcoming earnings report On the other hand if they miss the stock may move lower
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management s discussion of business conditions on the earnings call it s worth handicapping the probability of a positive EPS surprise
Zacks Consensus Estimate
This utility holding company is expected to post quarterly earnings of 0 97 per share in its upcoming report which represents a year over year change of 16 4
Revenues are expected to be 4 30 billion up 1 5 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 4 85 lower over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out Our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction has this insight at its core
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for PG E
For PG E the Most Accurate Estimate is the same as the Zacks Consensus Estimate suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate This has resulted in an Earnings ESP of 0
On the other hand the stock currently carries a Zacks Rank of 3
So this combination makes it difficult to conclusively predict that PG E will beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
While calculating estimates for a company s future earnings analysts often consider to what extent it has been able to match past consensus estimates So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that PG E would post earnings of 0 90 per share when it actually produced earnings of 1 04 delivering a surprise of 15 56
Over the last four quarters the company has beaten consensus EPS estimates four times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
PG E doesn t appear a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
PCG | PG E PCG Q2 Earnings Beat Estimates | PG E PCG came out with quarterly earnings of 1 10 per share beating the Zacks Consensus Estimate of 0 97 per share This compares to earnings of 1 16 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 13 40 A quarter ago it was expected that this utility holding company would post earnings of 0 90 per share when it actually produced earnings of 1 04 delivering a surprise of 15 56
Over the last four quarters the company has surpassed consensus EPS estimates four times
PG E which belongs to the Zacks Utility Electric Power industry posted revenues of 3 94 billion for the quarter ended June 2019 missing the Zacks Consensus Estimate by 8 28 This compares to year ago revenues of 4 23 billion The company has not been able to beat consensus revenue estimates over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
PG E shares have lost about 22 1 since the beginning of the year versus the S P 500 s gain of 17 2
What s Next for PG E
While PG E has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for PG E was unfavorable While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 4 Sell for the stock So the shares are expected to underperform the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 0 98 on 4 40 billion in revenues for the coming quarter and 3 82 on 17 35 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Utility Electric Power is currently in the bottom 31 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
XOM | Britain says West cannot treat Russia as an equal partner | LONDON Reuters Britain s defense minister said on Sunday he was ready to work with his new U S counterpart but that Western nations could not treat Russia as an equal partner as Moscow was a strategic competitor Several appointments by U S President elect Donald Trump have suggested his administration could forge warmer relations with Russia s Vladimir Putin worrying several European allies especially in eastern Europe I m ready to work with the new Secretary of Defence Jim Mattis to be strong against Russian aggression towards NATO to de escalate tensions with Moscow and as I said to continue to work with Russia on how we get towards a settlement in Syria Michael Fallon told the BBC That can t be treating Russia as an equal Russia is a strategic competitor to us in the West and we have to understand that he said Trump is expected to name the chief executive of Exxon Mobil Corp NYSE XOM as secretary of state a source told Reuters on Saturday an appointment that would put in place an official with close ties to the Russian government Fallon also emphasized Britain s support for Saudi Arabia after foreign minister Boris Johnson told an audience that the Saudis Iran and others were puppeteering and playing proxy wars A spokeswoman for Prime Minister Theresa May said earlier in the week that Johnson s views did not reflect the government s position on Saudi Arabia and its role in the region On Sunday Fallon emphasized support for the kingdom which since March 2015 has led a coalition launching air strikes in support of the Yemeni government of Abd Rabbu Mansour al Hadi against Houthi fighters who are backed by troops loyal to ex President Ali Abdullah Saleh
It Saudi Arabia is perfectly entitled to defend itself and it is also leading the coalition to restore the legitimate government of Yemen Fallon said |
XOM | Rick Perry a leading candidate for U S energy post source | By Steve Holland NEW YORK Reuters Rick Perry who proposed eliminating the U S Energy Department during his unsuccessful bid for the 2012 Republican presidential nomination has emerged as a leading candidate to head the agency under President elect Donald Trump a transition official said on Sunday Democratic U S Senators Heidi Heitkamp of North Dakota and Joe Manchin of West Virginia also are in the running for the job as Trump continues to fill key positions in his administration ahead of taking office on Jan 20 according to the official who spoke on condition of anonymity Perry served as governor of Texas a leading oil producing state from 2000 when he succeeded President George W Bush until 2015 In his two unsuccessful presidential runs he touted his record of job creation in the second most populous state Perry s proposal to scrap the Energy Department caused what has become known as his oops moment during a November 2011 debate when he could not remember the departments he wanted to eliminate It s three agencies of government when I get there that are gone commerce education and the um what s the third one there Let s see Perry said His debate adversaries tried to prod his memory but Perry ultimately gave up saying I can t The third one I can t Sorry Oops It was the Energy Department which is responsible for U S energy policy and oversees the nation s nuclear weapons program Perry also ran for the 2016 presidential nomination against Trump but dropped out in September 2015 after gaining little traction Perry initially was a fierce critic of Trump but later endorsed Trump and called him the people s choice In July 2015 Perry said Let no one be mistaken Donald Trump s candidacy is a cancer on conservatism and it must be clearly diagnosed excised and discarded If Perry gets the job it would be further indication that the incoming Trump administration may be friendly toward the fossil fuel industry Trump is set to pick U S Representative Cathy McMorris Rodgers a climate change skeptic and an advocate for expanded oil and gas development to head the Interior Department Trump s pick for the Environmental Protection Agency is Oklahoma Attorney General Scott Pruitt an ardent opponent of President Barack Obama s measures to curb climate change who has sued the EPA to block in a bid to undo a key regulation to curb greenhouse gas emissions mainly from coal fired power plants
And Trump is expected to name Rex Tillerson chief executive of oil giant Exxon Mobil Corp NYSE XOM as secretary of state |
XOM | Former U S Ambassador to U N claims WikiLeaks a False Flag Operation | Investing com Former U S Ambassador to the U N John Bolton said on Sunday that he suspected that the hacking of Democratic e mail accounts during this year s presidential campaign was a false flag operation designed to look like it was done by the Russians
Bolton is said to be the nominee for Deputy Secretary of State under President Trump and an announcement is due on that this week Rex Tillerson the CEO of Exxon Mobil Corporation NYSE XOM is said to be the nominee for Secretary of State according to media reports
It is not at all clear to me just viewing this from the outside that this hacking into the DNC Democratic National Committee and the RNC Republican National Committee was not a false flag operation Bolton told Fox News on Sunday We just don t know But I believe that intelligence has been politicized in the Obama administration to a very significant degree
Official Washington was all aflutter late last week over reports that the CIA believes that Russians with links to their government s military intelligence apparatus conducted the hacks of the DNC and released them to WikiLeaks RNC accounts were not penetrated despite attempts by the hackers
President Obama has ordered an investigation
Trump has said he does not believe the allegations and reckons that the story is being marketed by those who are still upset with the results of the U S presidential election which Hillary Clinton was wrongly predicted to win |
XOM | Trump says reports Russia helped him in U S election are ridiculous | By Doina Chiacu and Howard Schneider WASHINGTON Reuters President elect Donald Trump rejected as ridiculous U S intelligence reports that Russia intervened in the presidential election on his behalf through targeted hacking putting him at odds with top lawmakers who vowed to investigate the findings He blamed Democrats for news reports on the intelligence findings and said he did not believe they came from the Central Intelligence Agency I think it s ridiculous I think it s just another excuse I don t believe it Trump said in an interview on Fox News Sunday Trump s reluctance to blame Russia for interfering in the U S election has raised concerns among U S officials who fear he will go soft on Moscow at a time when they are worried about its increasingly aggressive behavior on cyber attacks and in Crimea Ukraine and Syria A U S intelligence official speaking on condition of anonymity harshly criticized Trump s rejection of the assessment that Russian hacking was intended to boost the president elect s prospects in the Nov 8 election It s concerning that intelligence on Russian actions related to the U S election is being dismissed out of hand as false or politically partisan said the U S intelligence official The inclination to ignore such intelligence and impugn the integrity of U S intelligence officials is contrary to all that is sacred to national security professionals who work day and night to protect this country The unusually harsh comment underscored the unprecedented tensions that Trump has created with the intelligence community he will command even before he s been sworn into office Two leading U S Senate foreign policy voices from Trump s own party expressed alarm on Sunday about the possibility of Moscow tipping the scales in favor of an American presidential candidate and promised to begin investigating immediately The Obama White House which has ordered intelligence agencies to review cyber attacks and foreign intervention in the 2016 election has formally accused Russia of a campaign of cyber attacks against Democratic Party organizations ahead of the presidential election Russian officials who have previously vehemently denied accusations of interference in the U S election were quiet In his search for a secretary of state Trump a New York real estate magnate is strongly considering Exxon Mobil Corp NYSE XOM Chief Executive Rex Tillerson who has close ties with Moscow and has spoken out against U S sanctions on Russia Republican Senator John McCain expressed concern about Tillerson s close relationship with Russian leader Vladimir Putin That would color his approach to Vladimir Putin and the Russian threat he said on Sunday on CBS Face the Nation A number of U S senators have expressed concerns about Tillerson suggesting his nomination could run into trouble in the Senate Trump s pick as national security adviser retired Army Lieutenant General Michael Flynn has also raised eyebrows in military circles through appearances on Russia s government run broadcaster RT particularly at a gala last year attended by Putin But Trump s choices to lead the CIA and the Pentagon U S Representative Mike Pompeo and retired Marine General James Mattis are more likely to take a harsher stance on Russia U S intelligence agencies have told Congress and President Barack Obama s administration that Russia has grown increasingly aggressive in Syria and Ukraine and has stepped up activities in cyberspace including meddling sometimes covertly in European and U S elections A senior U S intelligence official told Reuters that intelligence agencies had concluded with high confidence that not only did their Russian counterparts direct the hacking of Democratic Party organizations and leaders but did so to undermine Democratic candidate Hillary Clinton CONGRESS TO INVESTIGATE Trump questioned whether the CIA was behind the reports that indicated Moscow wanted him in the White House I think the Democrats are putting it out he said in the Fox News interview He said the intelligence community did not agree on Russian intervention They re fighting among themselves They re not sure he said McCain was at a loss on Sunday to explain Trump s repudiation of the Russian meddling I don t know what to make of it because it s clear the Russians interfered McCain said on CBS Whether they intended to interfere to the degree that they were trying to elect a certain candidate I think that s a subject of investigation but the facts are stubborn things McCain and fellow Republican Senator Lindsey Graham joined Democratic Senators Chuck Schumer and Jack Reed on Sunday in expressing concern over possible Russian interference and said they would work together to investigate such cyber attacks Recent reports of Russian interference in our election should alarm every American they said in a statement This cannot become a partisan issue The stakes are too high for our country McCain chairman of the Armed Services Committee said he would have a subcommittee led by Graham begin investigating the Russian hacking immediately Republican House of Representatives Speaker Paul Ryan cannot comment on classified briefings but he rejects any politicization of intelligence matters spokeswoman AshLee Strong said in an email Trump advisers disputed elements of the news reports focusing particularly on a New York Times story saying that intelligence officials concluded the computer systems of the Republican National Committee also had been hacked The fact that material from that intrusion had not been released the Times reported supported the conclusion that Russia was trying to help Trump The RNC was absolutely not hacked the RNC chairman and incoming White House chief of staff Reince Priebus said on NBC s Meet the Press Trump adviser Kellyanne Conway said Trump would not interfere with any congressional inquiry but that the president elect regarded the spate of hacking reports as part of an effort to relitigate the election He absolutely respects the intelligence community Conway said on CBS What he has said is laughable or ridiculous is that this was meant to elevate him to the presidency In the Fox News Sunday interview Trump also discussed his decision to receive the President s Daily Brief or PDB a highly classified document that can include details of U S and allied covert operations once a week far less often than most of his predecessors
Trump said a number of his top advisers received the briefing and he did not need to get the report more frequently under routine circumstances I don t need to be told the same thing every day every morning same words Sir nothing has changed Let s go over it again I don t need that he said |
XOM | Iraq to abide by OPEC cut expects output growth in future | By Rania El Gamal VIENNA Reuters Iraq is committed to cutting its production to comply with a global pact to support prices the country s oil minister said adding he was nevertheless confident OPEC s No 2 producer has the potential to boost its output in coming years Iraq is reviewing several options to implement the reduction including cuts from Kirkuk oilfield southern fields being developed by oil majors or other state run areas Oil Minister Jabar al Luaibi said in an interview The cuts will aim at the figures we agreed with OPEC definitely but for the areas of the cuts there are many options on the table Luaibi told Reuters on Saturday Last month OPEC agreed to cut output by 1 2 million bpd from January 2017 Baghdad which has called to be exempted from OPEC restrictions as it needs the income to fight Islamic State would reduce its output by around 200 000 barrels per day to 4 351 million bpd Luaibi said his ministry was in discussions with foreign companies operating Iraq s giant southern fields to implement some cuts during scheduled maintenance Some IOCs will have maintenance requirements in some limited places in some fields so this is a good opportunity to do them he said Iraq s production in December will be slightly higher than November s Luaibi said I can assure you that our production I am talking with confidence has reached the level of 4 8 million bpd Iraq has accepted a lower production reference level as part of the OPEC deal that estimated its output at 4 561 million bpd Luaibi said Baghdad has agreed to a lower level estimate because We want OPEC to unite so the oil price and the global market balance and improve But at the back of our minds we are confident that this was not the real production level however we hope this would be compensated with the improvement of the prices he said BUILDING CAPACITY Iraq has signed deals with majors such as Exxon Mobil NYSE XOM BP LON BP and Royal Dutch Shell LON RDSa to develop its fields Production has almost doubled to around 4 7 million bpd this year from 2 4 million bpd at the start of the decade But the growth has lagged the initial forecasts of production at 9 million bpd by 2018 rivaling Saudi Arabia the world s top oil exporter and OPEC s biggest producer Held back by red tape infrastructure constraints and difficult contract terms Iraq is now targeting a more modest 5 5 million to 6 million bpd by 2020 Oil companies operate in the southern oilfields under service contracts whereby they are paid a fixed dollar fee for additional volumes produced Iraq has been in talks with the companies to link the fees they receive to crude prices Luaibi said some companies are asking for revisions in some clauses of the contracts and his ministry was working with a consultancy in Finland over the revised contracts We will see something new happening in 2017 that would please the IOCs and safeguard our interests he said Luaibi who became oil minister earlier this year and has served previously as director general of South Oil Company which produces most of the nation s oil has made boosting Iraq s production a priority He said Iraq s target was to boost its output potential to 6 million by 2020 I think the 9 million bpd will be sort of appropriate after 2030 he said To help Iraq reach that target it needs water injection to enhance oil recovery and a crucial multi billion dollar water project that has been delayed for years is now being revived with a capacity of 5 million bpd of water
We put it on a fast track Luaibi said adding there will be a tender within this month if not then next month |
XOM | Tillerson choice raises questions of corporate vs national interest | By Valerie Volcovici and Arshad Mohammed WASHINGTON Reuters The central question facing Exxon Mobil Corp N XOM Chief Executive Rex Tillerson if he becomes U S secretary of state is whether a lifelong oil man with close ties to Russia can pivot from advancing corporate interests to serving the national interest Tillerson 64 got his start as a production engineer at Exxon in 1975 and has worked there ever since running business units in Yemen Thailand and Russia before being named chief executive in 2006 He was expected to retire next year Senior senators both Democrats and Republicans have expressed concern over Tillerson who emerged this weekend as Donald Trump s expected pick for secretary of state according to a source familiar with the situation By choosing him the president elect would add another and presumably highly influential person to his Cabinet and circle of advisers who may favor a soft line toward Moscow Among these is Trump s choice for national security adviser Michael Flynn who raised eyebrows when he sat beside Russian President Vladimir Putin at a Moscow banquet last year and who has argued that the United States and Russia should collaborate to end Syria s civil war and to defeat Islamic State militants Tillerson s links with Russia came under fire from top lawmakers on Sunday It s a matter of concern to me that he has such a close personal relationship with Vladimir Putin and obviously they ve done enormous deals together That would color his approach to Vladimir Putin and the Russian threat Republican Senator John McCain told CBS McCain added that Tillerson would nonetheless get a fair confirmation hearing Republican Senator Marco Rubio a former Republican presidential rival to Trump was even more forthright Being a friend of Vladimir is not an attribute I am hoping for from a SecretaryOfState Rubio said on his Twitter account A STRAIGHT ARROW Many U S officials are worried by Russia s increasingly aggressive behavior It annexed Crimea from Ukraine in 2014 has supported Syrian President Bashar al Assad in the Syrian civil war and is accused of interfering in U S domestic politics U S intelligence analysts have concluded that Russia intervened in the 2016 election to help Trump defeat Hillary Clinton and not just to undermine confidence in the U S electoral system a senior U S official said In his role at Exxon Tillerson maintained close ties with Putin and opposed U S sanctions against Russia for its incursion into Crimea Daniel Yergin author of the Pulitzer Prize winning The Prize the Epic Quest for Oil Money and Power said Russia represented a relatively small portion of Exxon s overall operations and played down its significance It was a business relationship Yergin said The whole Russian thing is so much front and center now so it s inevitable that those questions be asked but obviously if you are a major oil company you want to go to where your resources are You have to replace your reserves he added If he becomes secretary of state the interests he will pursue will be U S interests This is an Eagle Scout kind of guy He was president of the Boy Scouts he said He is a straight arrow If that s his mission that s what he ll do Trump praised Tillerson saying on his Twitter account on Saturday Whether I choose him or not for State Rex Tillerson the Chairman CEO of ExxonMobil is a world class player and dealmaker Stay tuned Reince Priebus the Republican National Committee chairman who has been tapped to serve as White House chief of Staff praised Tillerson s relationship with Putin the fact that he actually has a relationship with people like Vladimir Putin and others across the globe is something that we shouldn t be embarrassed by it It s something that I think could be a huge advantage to the United States Priebus said on ABC This Week However Senator Robert Menendez of New Jersey a senior Democratic member of the Senate Foreign Relations Committee that would weigh Tillerson s nomination was unsparing in his criticism of the possible appointment Reports that Rex Tillerson could be nominated to be our nation s top diplomat are alarming and absurd he said With Rex Tillerson as our secretary of state the Trump administration would be guaranteeing Russia has a willing accomplice in the president s cabinet guiding our nation s foreign policy Republicans will hold more seats 52 in the Senate than the 51 they will need to confirm Tillerson But they will have only 10 of the 19 seats in the Foreign Relations Committee so it will only take one Republican dissenter there to endanger the nomination At least one Republican committee member Rubio has already expressed reservations CLIMATE CHANGE Tillerson would be one of the few people selected for major roles in the Trump administration to believe that human activity causes climate change After Trump s election Exxon came out in support of the Paris Climate Agreement It has also advocated for a carbon tax and internally factors in a theoretical price on carbon as it weighs manufacturing and exploration costs of projects But some environmental groups are alarmed at the prospect of Exxon s CEO as the country s top diplomat Exxon is under investigation by the New York Attorney General s Office for allegedly misleading investors regulators and the public on what it knew about global warming Donald Trump appears intent to undo a century of environmental and social progress and return America to the age of robber barons and corporate trusts said Carroll Muffett president of the Center for International Environmental Law Who better to turn to than Exxon the granddaddy of them all |
CSCO | Zacks com Featured Highlights Cisco Systems Cardiovascular Systems Five9 Generac Holdings And Nxstage Medical | For Immediate Release
Chicago IL November 16 2016 Stocks in this week s article include Cisco Systems NASDAQ CSCO NASDAQ Cardiovascular Systems NASDAQ Five9 Inc NASDAQ Generac Holdings NYSE and Nxstage Medical NASDAQ
Screen of the Week of Zacks Investment Research by Kevin Matras
Top Stocks with Big Potential Catch up Moves
Given the recent run up in the market last week here s a screen I ve been using recently for my own stock picking
First it focuses on the top Zacks Ranked Sectors and Industries Then it focuses on the Zacks Rank 1s 2s and 3s which are Strong Buys Buys and Holds respectively But then it selects the outperforming stocks with the smallest percentage price change over the last 4 weeks
Why would I do something like that
Here s why
You ve probably heard the old adage that roughly half of a stock s price movement can be attributed to the group that it s in And that s true In fact oftentimes even a mediocre stock in a top group will outperform a top stock in a poor group for this very reason
Now take a look at any top group You ll see plenty of fantastic stocks with some impressive price gains in there But not every stock in every group moves in lockstep at the exact same time Some will move more than others at any given time
So by focusing on the stocks with the smallest percentage price change with fundamentals that are just as good as those making the biggest price change you might find yourself getting into the stocks ready to make the biggest potential catch up move
Here s how to set up that screen
Best Zacks Ranked Sectors Best 8
We re screening for only those stocks with the best lowest average Zacks Rank With 16 sectors the best 8 sectors give us the best 50 of sectors
Best Zacks Ranked Industries Best 132
Next step is to get only the best Zacks Ranked Industries coming thru Since there are 264 X or expanded industries we look at the best 132 will give us the best 50 of industries But note that only the industries that also happen to be in the top sectors will get thru If an industry is ranked as one of the best but it s outside of the top sector rank it will not get thru
Zacks Rank less than or equal to 2
Now the screen gets narrowed down even more by looking at only the Zacks Rank 1s 2s Only Strong Buys and Buys can get through
Price and Avg Volume greater than or equal to 5 and 100 000 shares
Only stocks over 5 with at least an average of 100 0000 shares traded daily will be considered
Relative Price Change 4 Weeks greater than 0
This means we re screening for only those stocks that have outperformed the market S P 500 over the last 4 weeks
Change in Price 4 Weeks Bottom 50
Then finally we re scanning for the bottom 50 stocks with the lowest percentage price change over the last 4 weeks So while all of these stocks have outperformed the market they increased in price less than their peers
So each one of these stocks is in a top Sector and top Industry within that Sector This alone will tip the odds of success in your favor by a great deal when you consider that the best Zacks Ranked groups outperform the worst ones by a factor of 2 to 1
Then by selecting those stocks with the best Zacks Rank along with the best price performance over the last 4 weeks you now have only a list of winners from which to choose from
And from that list of winners we re selecting the ones that have gained less than their peers on that list Remember these stocks aren t dogs or unresponsive stocks Quite the contrary they have all outperformed the market It just so happens that they increased less than the others on the list But because they are a top rated stock in a top rated industry we ve singled these out as the ones that could make the biggest move to catch up to the others
It s an interesting screen that has generated a lot of great names
Here are 5 from that list
NASDAQ Cisco Systems
NASDAQ Cardiovascular Systems
NASDAQ Five9 Inc
NYSE Generac Holdings
NASDAQ Nxstage Medical
All great looking stocks that seem to have lots more upside in store for them
Get the rest of the stocks on the list and start putting this and other ideas to the test It can all be done with the Research Wizard stock picking and backtesting software
The Research Wizard is a great place to begin It s easy to use Everything is in plain language And it s very intuitive Start your Research Wizard trial today And the next time you read an economic report open up the Research Wizard plug your finds in and see what gems come out
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Sign up now for your free trial today and start picking better stocks immediately And with the backtesting feature you can test your ideas to see how you can improve your trading in both up markets and down markets Don t wait for the market to get better before you decide to do better Start learning how to be a better trader today
Disclosure Officers directors and or employees of Zacks Investment Research may own or have sold short securities and or hold long and or short positions in options that are mentioned in this material An affiliated investment advisory firm may own or have sold short securities and or hold long and or short positions in options that are mentioned in this material
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Past performance is no guarantee of future results Inherent in any investment is the potential for loss This material is being provided for informational purposes only and nothing herein constitutes investment legal accounting or tax advice or a recommendation to buy sell or hold a security No recommendation or advice is being given as to whether any investment is suitable for a particular investor It should not be assumed that any investments in securities companies sectors or markets identified and described were or will be profitable All information is current as of the date of herein and is subject to change without notice Any views or opinions expressed may not reflect those of the firm as a whole Zacks Investment Research does not engage in investment banking market making or asset management activities of any securities These returns are from hypothetical portfolios consisting of stocks with Zacks Rank 1 that were rebalanced monthly with zero transaction costs These are not the returns of actual portfolios of stocks The S P 500 is an unmanaged index Visit for information about the performance numbers displayed in this press release |
CSCO | Cisco CSCO Slumps 4 On Q1 Earnings Beat Weak Guidance | Cisco Systems Inc NASDAQ CSCO just released its first quarter fiscal 2017 financial results after the bell posting earnings of 55 cents per share accounting for non stock based compensation and BNRI and revenues of 12 4 billion CSCO is a 2 Buy on the Zacks Rank and is down 4 24 to 30 23 per share in after hours trading
Beat earnings estimates The company reported earnings of 55 cents per share topping the Zacks Consensus Estimate of 54 cents per share This number excludes 9 cents from non recurring items
Beat revenue estimates The company saw revenue figures of 12 4 billion also beating our consensus estimate of 12 342 billion and growing 1 year over year Product revenue was down 1 and service revenue was up 7
On a GAAP basis total gross margin and product gross margin were 63 8 and 63 4 respectively thanks to productivity improvements and the divestiture of the SP Video CPE Business which was partially offset by pricing and to a lesser extent product mix Non GAAP total gross margin and product gross margin were 65 2 and 64 8 respectively
Looking ahead to Q2 revenue is forecasted to decline 2 to 4 year over year while GAAP EPS is expected to fall in the range of 42 cents to 47 cents and non GAAP EPS in the range of 55 cents to 57 cents
We had a good quarter despite a challenging global business environment and we performed well in our priority areas said Chuck Robbins CEO Cisco We are leading our customers in their digital transition by providing them with highly secure automated and intelligent solutions in the ways they want to consume them Our innovation pipeline is robust and we are well positioned for the future
Here s a graph that looks at Cisco s price consensus and EPS surprise CISCO SYSTEMS Price Consensus and EPS Surprise Cisco Systems is the worldwide leader in networking for the Internet Cisco s Internet Protocol based networking solutions are the foundation of the Internet and most corporate education and government networks around the world Cisco provides the broadest line of solutions for transporting data voice and video within buildings across campuses or around the world
Stocks that Aren t in the News Yet
You are invited to download the full up to the minute list of 220 Zacks Rank 1 Strong Buys free of charge Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of 26 per year |
CSCO | Cisco Earnings Preview A Low Bar To Beat | Networking equipment giant Cisco Systems NASDAQ CSCO will deliver its fiscal Q1 earnings results after the closing bell today Here s a preview of what investors can expect
Cisco will unveil its results via press release shortly after the market closes at 4 00 pm Eastern with a 4 30 pm conference call to follow Typically the company provides guidance within the press release itself so the conference call tends to be a non event
Analysts are expecting Q1 EPS of 0 59 which would be flat from last year on revenue of 12 33 billion which would be a 2 7 decrease Cisco should provide guidance for Q2 as well and Wall Street is expecting a forecast of 0 59 per share and 12 15 billion for the current period
Another important metric to key on will be CSCO s gross margins Last quarter the company posted non GAAP gross margins of 64 6 up 0 7 percentage points and product gross margins of 62 9 also up 0 7 points Meanwhile service gross margins were 67 0 up 1 1 points
You wouldn t know it from its share price performance this year but Cisco has repeatedly said the current operating environment is very challenging The company sees significant volatility continuing in its geographic markets which was evident by the fact that in fiscal Q4 revenue in its Service Provider and Emerging Markets segments turned negative down 5 and 6 respectively Outside of those two units however the remainder of Cisco s businesses saw 5 growth in orders
Cisco shares fell 0 03 0 08 to 31 67 in Wednesday morning trading Year to date CSCO has gained 16 52 more than doubling the return of the benchmark S P 500 index during the same period |
CSCO | Cisco s Weak Forecast Sends Shares Plunging 5 | Networking equipment giant Cisco Systems NASDAQ CSCO posted solid fiscal Q1 numbers late today but its surprsingly weak forecast sent shares significantly lower
The San Jose based company reported Q1 adjusted net income of 0 61 per share beating out analysts 0 59 estimate by two cents Revenues fell 2 6 from last year to 12 35 billion also edging out Wall Street s view of 12 33 billion Cisco noted that product revenue was down 1 in the latest period which was more than offset by a 7 rise in service revenue Geographically revenue in the Americas fell 1 EMEA was flat and APJC rose 6 Product revenue performance was led by Security and NGN Routing which increased 11 and 6 respectively Switching decreased 7 Collaboration and Data Center each decreased 3 and Wireless and Service Provider Video each decreased 2 Deferred revenue rose 12 to 17 billion helped mainly by subscription based and software offerings Deferred service revenue also saw strong growth up 8 Non GAAP total gross margin was 65 2 up from 64 5 in the first quarter of fiscal 2016 Looking ahead Cisco issued weaker than expected second quarter earnings guidance of 0 55 to 0 57 per share which would miss Wall Street s 0 59 estimate Q2 revenues are expected to fall 2 to 4 to a range of 11 27 to 11 51 billion That would also fall very short of analyst expectations of 12 15 billion The company commented via press release
We had a good quarter despite a challenging global business environment and we performed well in our priority areas We executed well in Q1 delivering profitable growth and saw strong adoption of our subscription based and software offerings as we transition our business to a more recurring revenue model
Cisco shares fell 1 47 4 66 to 30 10 in after hours Wednesday trading Prior to today s report CSCO had gained 16 31 year to date |
XOM | ExxonMobil XOM Bids For InterOil Trumps Oil Search Offer | ExxonMobil Corporation NYSE XOM has placed a bid for Canadian company InterOil to enhance its liquefied natural gas position in Papua New Guinea Per Oil Search the U S supermajor s offer of about 2 2 billion for Papua New Guinea focused InterOil Corp has outbid that of Oil Search which is backed by French energy giant Total SA TO TOT with an agreement to buy part of InterOil s stake in the potentially lucrative Elk Antelope gas field According to reports ExxonMobil has found favor with InterOil ExxonMobil has offered 45 worth of its own shares for each InterOil share along with a payment of 0 90 per million cubic feet equivalent mcfe for resources of over 6 2 trillion cubic feet in the Elk Antelope gas field Oil Search on the other hand has offered 8 05 of its own shares for every InterOil share and has valued InterOil s shares at 42 66 at the end of the trading session as of July 15 Also the company has offered 0 77 per mcfe for resources of over 6 2 tcfe at Elk Antelope Oil Search which had announced its plan to buyout InterOil in May has until Jul 21 to submit a revised offer The company is presently having discussions with Total about raising the bid Per the agreement Oil Search also intends to farm out a portion of InterOil s exploration assets and interests acquired from a petroleum retention license to Total EXXON MOBIL CRP Price InterOil s assets comprise a 36 5 interest in the Papua LNG Project that includes Elk Antelope one of Asia s largest untapped gas fields and owns exploration licenses covering 16 000 square kilometers However if InterOil s board changes its decision and the agreement is terminated Oil Search would be entitled to receive a break fee of 60 million Total would receive 20 of this amount Currently ExxonMobil holds a Zacks Rank 2 Buy Other well ranked players from the energy sector are Sasol Ltd NYSE SSL and ReneSola Ltd NYSE SOL Both of these stocks sport a Zacks Rank 1 Strong Buy Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days |
XOM | Stocks And Currencies Off To A Good Start | By Kathy Lien Managing Director of FX Strategy for BK Asset Management
Many currency pairs traded higher on Monday thanks to the overall strength in U S stocks The Dow Jones Industrial Average and S P 500 hovered near record levels as central banks gear up to increase stimulus No actions will be taken this week with only the European Central Bank monetary policy meeting on the calendar but a few central banks are at the cusp of easing The ECB is in no rush to add to their program having just eased in March but Mario Draghi won t miss the opportunity to tell us that they are watching the market carefully and are prepared to take additional steps if needed which could be enough to send the EUR USD lower Next week we could finally see some action from the Bank of Japan but for now we expect a shallow correction after last week s strong moves The rise in U S yields boosted USD JPY but the 50 day SMA should cap gains for the time being The U S economic calendar is light on market moving data this week so the dollar won t dictate currency flows especially given the abundance of market moving data from other parts of the world
In the meantime our focus will be on European currencies Aside from Thursday s ECB meeting Eurozone PMIs are also due for release but the big story is the British pound We know that Britain s decision to leave the European Union hurts the U K economy but the question is just how bad This week we finally start to get some answers with consumer prices retail sales and the country s labor market report scheduled for release These numbers which are for the entire month of June won t fully reflect the impact of Brexit but if they are weak they will exacerbate the market s concerns about the current state and future outlook of the U K economy Sterling traded higher Monday on M A flow and comments from Bank England member Weale who suggested that more evidence is needed before a rate cut While BoE Governor Carney and MPC member Vlieghe don t share this view the fact that even one member of the MPC doubts the necessity of immediate easing was enough to drive sterling higher There s been quite a bit of intraday volatility in GBP USD but at the end of the day we still believe that rallies should be sold We are looking for most of this week s U K economic reports to surprise to the downside putting renewed pressure on the British pound We also feel that EUR USD is a sell on rallies particularly on the 1 11 handle
The Australian dollar was Monday s best performer rising ahead of the Reserve Bank of Australia meeting minutes due Monday evening When the Reserve Bank of Australia left interest rates unchanged earlier this month it expressed concern about the global economy and impact of Brexit but there was no real urgency to lower interest rates AUD rallied in response then so if the minutes echo this sentiment AUD could extend its gains particularly against NZD For its part the New Zealand dollar ended the day unchanged against the greenback but was sharply lower versus the Australian dollar Kiwi was dragged down by weaker data as consumer prices came in softer than expected at 0 4 vs 0 5 forecast The PMI Services index also fell to 56 7 from 56 9 triggering speculation that the central bank will express concerns at this week s impromptu economic update Last week the RBNZ noted that inflation was lower than expected which is true considering that year over year CPI growth held steady at 0 4 in the second quarter Most central banks try to aim for inflation near 2 and of course many are undershooting their targets Investors will be particularly cautious about buying NZD ahead of Wednesday evening s RBNZ report
The Canadian dollar also ended the day unchanged despite a decline in oil prices Supply disruptions ranging from Turkey s failed coup to protests in Libya shutting down the Hariga oil terminal Exxon Mobil NYSE XOM subsidiary Mobil Producing s Nigeria decision to declare force majeure due to a system anomaly and a 24 hour strike set for July 26 at Royal Dutch Shell s NYSE RDSa platforms in the North Sea failed to lift the commodity Oil is in a downtrend as supply outpaces demand but the Canadian dollar remains strong |
PCG | New report details PG E s decision not to cut power ahead of deadly fire | PG E PCG 0 4 warned customers in the days leading up to California s deadliest wildfire before making its final decision not to cut electricity more than six hours after the Camp Fire began on Nov 8 according to a report filed with state regulators
Residents who lost loved ones and homes have sued PG E blaming the company s equipment for starting the fire and the new report could add ammunition to those lawsuits
We know how much our customers rely on electric service and would only consider temporarily turning off power as a last resort a company spokesperson tells Bloomberg By the afternoon of Nov 8 weather conditions had improved and PG E no longer anticipated the need to proactively de energize
Earlier PG E up another 7 continuing to recoup heavy losses following wildfire Nov 27
Now read |
PCG | List of missing in California s deadliest wildfire drops sharply | By Steve Gorman Reuters Two days after authorities in Northern California ended their search for human remains from the deadliest wildfire in state history the number of people listed as missing was reduced on Friday to fewer than 50 down from the nearly 200 last tallied The confirmed death toll from the Camp Fire stood unchanged from the past few days at 88 but the newly revised roster of people still unaccounted for came as welcome news three weeks after flames ravaged the Sierra foothills town of Paradise At a news conference on Wednesday night Butte County Sheriff Kory Honea said search and recovery teams had finished combing through the ruins of approximately 18 000 homes and other buildings incinerated by the blaze The missing persons list then consisted of 196 names though Honea said he was hopeful that many individuals would eventually turn up alive as they realized that loved ones were looking for them By Friday night the whereabouts of most had indeed been determined and the list was winnowed down again to just 49 names the sheriff s office said That total was by far the smallest to date greatly diminishing the number of people who might potentially be declared missing and presumed dead Honea has acknowledged the possibility that some who perished in the blaze might never be found but he also has refused to speculate on how many such cases might exist The number of missing has fluctuated widely since the fire erupted on Nov 8 briefly exceeding 1 200 names about two weeks ago With the fire now reduced to embers the National Weather Service issued flash flood warnings on Thursday and Friday for the burn zone as showers and thunderstorms heightened the risk of heavy runoff in areas stripped of vegetation by the fire The bulk of the devastation occurred in and around the hamlet of Paradise a town once home to almost 27 000 people many of them retirees about 175 miles 280 km north of San Francisco The current death toll already ranks as the greatest loss of life on record from a California wildfire and the most from a wildfire anywhere in the United States dating back to Minnesota s 1918 Cloquet Fire which killed as many as 1 000 people Authorities attribute the Camp Fire s high casualty count in large part to the tremendous speed with which flames raced through Paradise with little warning driven by howling winds and fueled by drought desiccated scrub and trees Remains of many victims were found in the ashen rubble of homes others inside or near the burned out wreckage of vehicles
The cause of the blaze remained under investigation But electric utility PG E Corp N PCG reported equipment problems near the origin of the fire around the time it began |
PCG | PG E seeks 12 percent rate hike in 2020 | Reuters PG E Corp N PCG said on Thursday it had requested California s top utilities regulator for a 12 percent rate hike in 2020 to fund its community wildfire safety program insurance liabilities and core gas and electric operations The proposal does not request funding for potential lawsuits or claims resulting from the 2017 and 2018 Northern California wildfires the company said in a filing The utility faces regulatory curbs on how much it can charge consumers restricting its ability to make up for losses through rate hikes PG E had previously forecast a 2019 electric transmission revenue requirement of 1 96 billion up 9 5 percent from 2018 While the exact extent of PG E s fire related liabilities remains unclear the company had previously said its liability could exceed its insurance coverage if its electrical equipment was found to have caused the Camp Fire The blaze swept through the town of Paradise and killed 86 people in the deadliest and most destructive wildfire in California s history
The company also said its estimated undiscounted cost to decommission its nuclear power plants rose by about 700 million due to potential costs related to waste disposal program oversight and site infrastructure |
PCG | PG E in spotlight for falsifying safety records | The troubles are piling up for Pacific Gas and Electric Company NYSE PCG as the California Public Utilities Commission ordered immediate action against the utility for falsifying safety documents for natural gas pipelines The state regulator found PG E lacked sufficient staffing to locate and mark natural gas pipelines in compliance with law leading employees to falsify data from 2012 to 2017 Now read |
PCG | Height Capital Markets defends PGE | Height Capital Markets updates on the developments with Pacific Gas Electric NYSE PCG and the California wildfires charges The firm thinks California Attorney General Xavier Becerra took a milder stance than some of the media headlines on potential murder charges are indicating this morning Height s take on the California AG He emphasized that his office offered no opinion regarding PCG s criminal negligence or recklessness only a summary of the charges they would face if found criminally culpable With the AG s brief out of the way we are looking towards 2019 for the release of the much anticipated Tubbs fire report from CalFire Last week Citi defended PG E by noting that structural changes forced on the company could lower future risk Previously PG E may face charges in California wildfires Dec 31 PCG 4 35 premarket to 22 85 Now read |
PCG | PG E faces 20M lawsuit over 2013 California fire that destroyed power plant | PG E NYSE PCG is sued by Calpine s Geysers Power unit for the utility s role in a 2013 fire that destroyed one of its power plants causing more than 20M in damages Geysers claims an oil filled circuit breaker in a PG E switchyard exploded and sparked a fire that spread across thousands of acres in Sonoma County Calif and destroyed its McCabe 5 6 power plant the lawsuit also says PG E failed to properly maintain the high voltage transmission equipment that caused the fire Geysers says the companies attempted to resolve disputes about PG E s liability related to the McCabe plant and its operations but the negotiations failed to result in a deal Now read |
PCG | PG E seeks to make changes to its board | Reuters PG E Corp N PCG the electricity provider in the northern California region ravaged by a deadly wildfire said it was searching for new directors at its holding company and its utility subsidiary Pacific Gas and Electric Co The fire broke out on the morning of Nov 8 near the Northern California mountain community of Paradise sweeping through the town and killing at least 86 people in the deadliest and most destructive wildfire in state history PG E had reported equipment problems near the origin of the fire around the time it began PG E faces billions of dollars of potential liabilities related to the wildfires if an investigation determines its equipment caused them PG E whose shares have lost nearly half of their value since the wildfire said it is working with a leading search firm to identify new directors and is interviewing several candidates A company spokeswoman said no decision has been made on whether to increase the size of the board or to replace existing members PG E said it is reviewing structural options to implement necessary changes while meeting customer and operational needs The board is actively assessing PG E s operations finances management structure and governance the company said The company said it has formed a special board committee that includes independent experts to advise on wildfire safety best practices Earlier last month the California Public Utilities Commission CPUC opened a proceeding to consider penalties against the company ordering immediate action against the utility for falsifying safety documents for natural gas pipelines The San Francisco Chronicle in December reported that California state Senator Bill Dodd called for a management shakeup at PG E in light of the CPUC findings
Dodd said findings of the regulator showed that the utility and its parent company PG E need systematic change including on its board of directors and in the executive suite the newspaper had reported |
PCG | PG E PCG Up 4 5 Since Last Earnings Report Can It Continue | A month has gone by since the last earnings report for PG E PCG Shares have added about 4 5 in that time frame outperforming the S P 500
Will the recent positive trend continue leading up to its next earnings release or is PG E due for a pullback Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important drivers PG E Corp Q4 Earnings Top Revenues Lag EstimatesPG E Corporation reported adjusted operating earnings per share of 80 cents per share in fourth quarter 2018 which surpassed the Zacks Consensus Estimate of 62 cents by 29 The bottom line also increased 27 from the year ago quarter s tally This year over year upside can be attributed to a reduction in short term incentive compensation growth in rate base earnings timing of operational spend in 2017 and probable cost recoveries of insurance premiums incurred in 2018 Including one time items the company reported GAAP losses of 13 24 per share against the earnings of 22 cents per share generated in the prior year quarter For 2018 PG E Corp s adjusted operating EPS came in at 4 per share up 8 7 from the prior year quarter s 3 68 per share The figure also surpassed the Zacks Consensus Estimate of 3 81 by 5 Revenue UpdatePG E Corp s total revenues of 4 088 million missed the Zacks Consensus Estimate of 4 285 million by 4 6 The top line also declined 2 2 from the year ago quarter s number While electric revenues decreased 3 37 from the prior year quarter s tally natural gas revenues improved 9 year over year For 2018 PG E Corp s revenues were 16 759 million down 2 2 from the prior year quarter s 17 135 million The figure also missed the Zacks Consensus Estimate of 17 110 million by 2 05 Operational HighlightsTotal operating expenses in the reported quarter totaled 13 618 million up 269 8 from 3 683 million in fourth quarter 2017 Costs increased due to higher operating and maintenance expenses along with higher depreciation amortization and decommissioning expenses The company generated operating losses of 9 530 million against the 417 million registered operating income in last year s fourth quarter Interest expenses in fourth quarter 2018 summed 697 million compared with 225 million in the year ago period Wildfire related CostsThe company has incurred a total of 14 billion in pre tax charges related to the 2018 Camp Fire and the 2017 Northern California wildfires to date which reflects the lower end of the range of estimated losses the company faces from such wildfires The charges represent a portion of the previously announced estimate of potential wildfire liabilities which could exceed more than 30 billion GuidancePG E Corp has not provided guidance for 2019 GAAP earnings and adjusted earnings from operations due to the continuing uncertainty related to the 2018 Camp Fire and the 2017 Northern California wildfires and the Chapter 11 proceedings
How Have Estimates Been Moving Since Then
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions The consensus estimate has shifted 6 33 due to these changes
VGM Scores
Currently PG E has a nice Growth Score of B however its Momentum Score is doing a bit better with an A Charting a somewhat similar path the stock was allocated a grade of B on the value side putting it in the top 40 for this investment strategy
Overall the stock has an aggregate VGM Score of A If you aren t focused on one strategy this score is the one you should be interested in
Outlook
PG E has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
PCG | Can PG E PCG Keep The Earnings Surprise Streak Alive | If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report you should consider PG E PCG This company which is in the Zacks Utility Electric Power industry shows potential for another earnings beat
When looking at the last two reports this utility holding company has recorded a strong streak of surpassing earnings estimates The company has topped estimates by 14 96 on average in the last two quarters
For the most recent quarter PG E was expected to post earnings of 0 62 per share but it reported 0 80 per share instead representing a surprise of 29 03 For the previous quarter the consensus estimate was 1 12 per share while it actually produced 1 13 per share a surprise of 0 89
Price and EPS Surprise
Thanks in part to this history there has been a favorable change in earnings estimates for PG E lately In fact the Zacks Earnings ESP Expected Surprise Prediction for the stock is positive which is a great indicator of an earnings beat particularly when combined with its solid Zacks Rank
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank 3 Hold or better produce a positive surprise nearly 70 of the time In other words if you have 10 stocks with this combination the number of stocks that beat the consensus estimate could be as high as seven
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
PG E currently has an Earnings ESP of 0 36 which suggests that analysts have recently become bullish on the company s earnings prospects This positive Earnings ESP when combined with the stock s Zacks Rank 3 Hold indicates that another beat is possibly around the corner
When the Earnings ESP comes up negative investors should note that this will reduce the predictive power of the metric But a negative value is not indicative of a stock s earnings miss
Many companies end up beating the consensus EPS estimate though this is not the only reason why their shares gain Additionally some stocks may remain stable even if they end up missing the consensus estimate
Because of this it s really important to check a company s Earnings ESP ahead of its quarterly release to increase the odds of success Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported |
PCG | PG E PCG Q1 Earnings Surpass Estimates | PG E PCG came out with quarterly earnings of 1 04 per share beating the Zacks Consensus Estimate of 0 90 per share This compares to earnings of 0 91 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 15 56 A quarter ago it was expected that this utility holding company would post earnings of 0 62 per share when it actually produced earnings of 0 80 delivering a surprise of 29 03
Over the last four quarters the company has surpassed consensus EPS estimates four times
PG E which belongs to the Zacks Utility Electric Power industry posted revenues of 4 01 billion for the quarter ended March 2019 missing the Zacks Consensus Estimate by 4 34 This compares to year ago revenues of 4 06 billion The company has not been able to beat consensus revenue estimates over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
PG E shares have lost about 8 6 since the beginning of the year versus the S P 500 s gain of 16 6
What s Next for PG E
While PG E has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for PG E was mixed While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 3 Hold for the stock So the shares are expected to perform in line with the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 1 04 on 4 43 billion in revenues for the coming quarter and 3 88 on 17 56 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Utility Electric Power is currently in the bottom 41 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
PCG | Is PG E PCG Stock Undervalued Right Now | Here at Zacks our focus is on the proven Zacks Rank system which emphasizes earnings estimates and estimate revisions to find great stocks Nevertheless we are always paying attention to the latest value growth and momentum trends to underscore strong picks
Of these perhaps no stock market trend is more popular than value investing which is a strategy that has proven to be successful in all sorts of market environments Value investors use tried and true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits For example value investors will be interested in stocks with great grades in the Value category When paired with a high Zacks Rank A grades in the Value category are among the strongest value stocks on the market today
One company value investors might notice is PG E PCG PCG is currently sporting a Zacks Rank of 2 Buy as well as a Value grade of A The stock is trading with P E ratio of 5 45 right now For comparison its industry sports an average P E of 14 36 Over the past 52 weeks PCG s Forward P E has been as high as 12 39 and as low as 1 59 with a median of 10 32
PCG is also sporting a PEG ratio of 1 92 This popular metric is similar to the widely known P E ratio with the difference being that the PEG ratio also takes into account the company s expected earnings growth rate PCG s industry has an average PEG of 2 50 right now Over the last 12 months PCG s PEG has been as high as 3 54 and as low as 0 46 with a median of 2 52
Another notable valuation metric for PCG is its P B ratio of 0 89 The P B ratio pits a stock s market value against its book value which is defined as total assets minus total liabilities This stock s P B looks solid versus its industry s average P B of 1 60 Over the past 12 months PCG s P B has been as high as 1 29 and as low as 0 26 with a median of 1 05
These are just a handful of the figures considered in PG E s great Value grade Still they help show that the stock is likely being undervalued at the moment Add this to the strength of its earnings outlook and we can clearly see that PCG is an impressive value stock right now |
PCG | Is PG E PCG A Great Value Stock Right Now | The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks Nevertheless we know that our readers all have their own perspectives so we are always looking at the latest trends in value growth and momentum to find strong picks
Looking at the history of these trends perhaps none is more beloved than value investing This strategy simply looks to identify companies that are being undervalued by the broader market Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large
Luckily Zacks has developed its own Style Scores system in an effort to find stocks with specific traits Value investors will be interested in the system s Value category Stocks with both A grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now
PG E PCG is a stock many investors are watching right now PCG is currently holding a Zacks Rank of 2 Buy and a Value grade of A
Investors should also note that PCG holds a PEG ratio of 2 03 This popular metric is similar to the widely known P E ratio with the difference being that the PEG ratio also takes into account the company s expected earnings growth rate PCG s PEG compares to its industry s average PEG of 2 49 Within the past year PCG s PEG has been as high as 3 54 and as low as 0 46 with a median of 2 35
Investors should also recognize that PCG has a P B ratio of 0 73 Investors use the P B ratio to look at a stock s market value versus its book value which is defined as total assets minus total liabilities This stock s P B looks attractive against its industry s average P B of 1 72 Over the past year PCG s P B has been as high as 1 29 and as low as 0 26 with a median of 0 96
Value investors will likely look at more than just these metrics but the above data helps show that PG E is likely undervalued currently And when considering the strength of its earnings outlook PCG sticks out at as one of the market s strongest value stocks |
PCG | PG E PCG Down 15 2 Since Last Earnings Report Can It Rebound | A month has gone by since the last earnings report for PG E PCG Shares have lost about 15 2 in that time frame underperforming the S P 500
Will the recent negative trend continue leading up to its next earnings release or is PG E due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important drivers PG E Corporation Q1 Earnings Beat Revenues Down Y Y PG E Corporation reported adjusted operating earnings per share of 1 04 in first quarter 2019 which surpassed the Zacks Consensus Estimate of 90 cents by 15 6 The bottom line also increased 14 3 from the year ago quarter s figure The increase in quarter over quarter non GAAP earnings from operations was primarily driven by growth in rate base earnings timing of insurance premiums and timing of taxes Including one time items the company reported GAAP earnings of 25 cents per share compared to 86 cents in the prior year quarter Revenue Update PG E Corp s total revenues of 4 011 million missed the Zacks Consensus Estimate of 4 190 million by 4 2 The top line also declined 1 1 from the year ago quarter While electric revenues decreased 5 4 from the prior year quarter s figure natural gas revenues improved 10 3 year over year Operational Highlights Operating expenses in the reported quarter totaled 3 822 million up 10 6 from 3 457 million in first quarter 2018 Costs increased due to higher cost of natural gas increased operating and maintenance expenses along with escalated depreciation amortization and decommissioning expenses The company generated operating income of 189 million compared to operating income of 599 million in the previous year s first quarter Interest expenses in first quarter 2019 summed 103 million compared with 220 million in the year ago period Guidance PG E Corp has not provided guidance for 2019 GAAP earnings and adjusted earnings from operations due to the continuing uncertainty related to the 2018 Camp Fire and the 2017 Northern California wildfires and the Chapter 11 proceedings and legislative and regulatory reforms How Have Estimates Been Moving Since Then
Fresh estimates followed a downward path over the past two months
VGM Scores
Currently PG E has a nice Growth Score of B however its Momentum Score is doing a bit better with an A Following the exact same course the stock was allocated a grade of A on the value side putting it in the top quintile for this investment strategy
Overall the stock has an aggregate VGM Score of A If you aren t focused on one strategy this score is the one you should be interested in
Outlook
PG E has a Zacks Rank 2 Buy We expect an above average return from the stock in the next few months |
XOM | ExxonMobil leaves McLaren for Red Bull F1 team | LONDON Reuters McLaren have lost another long term partner to Formula One rivals Red Bull with oil giant ExxonMobil NYSE XOM following the example of Tag Heuer Red Bull said in a statement on Thursday that ExxonMobil will replace Total as their official partner for fuel lubricant and motor oil in 2017 The Mobil 1 and Esso brands will feature on the cars driven by Australian Daniel Ricciardo and Dutch teenager Max Verstappen as well as on overalls and helmets Red Bull s Renault PA RENA engines carry the branding of Swiss watch company Tag Heuer who left McLaren at the end of the 2015 season after a 30 year partnership ExxonMobil have been McLaren s partners for the past 21 years during which time they have claimed three drivers world championships one constructors title and 78 race victories McLaren are the second most successful team in Formula One history but have not won the constructors title since 1998 and have struggled to be competitive in their latest partnership with Honda The shareholders recently ousted Ron Dennis as chief executive and chairman ending his 35 year involvement with the team
Red Bull racked up four successive drivers and constructors titles between 2010 and 2013 They ended the 2016 season in second place to Mercedes with McLaren sixth overall |
XOM | Trump ex Vice President Gore meet to talk climate policy | By Amy Tennery and Timothy Gardner NEW YORK WASHINGTON Reuters Former U S Vice President Al Gore a leading voice in the fight against climate change and Donald Trump who at one point called it a hoax met on Monday in what Gore called a productive session Gore a Democrat spent about 90 minutes in meetings at the Republican president elect s Trump Tower apartment and office building in Manhattan He also met briefly with Trump s daughter Ivanka who has attended a series of high level meetings since her father won the Nov 8 election Gore who lost the 2000 presidential election to Republican George W Bush has been devoted for years to lowering carbon emissions blamed for climate change As he campaigned for Democratic presidential candidate Hillary Clinton earlier this year Gore who was vice president under Clinton s husband former President Bill Clinton warned that Trump would steer the world toward climate catastrophe if elected That warning came as Trump gave speeches calling on the United States to drop out of last year s global climate accord signed in Paris to lower carbon emissions blamed for a warming planet Trump also referred to human induced climate change as a hoax and had tweeted that the concept of global warming was created by and for the Chinese in order to make U S manufacturing non competitive Since then however in an interview with the New York Times Trump has indicated he might have an open mind to joining the effort to battle climate change EXTREMELY INTERESTING CONVERSATION Gore had a more upbeat take on Trump after huddling with the wealthy New York real estate developer It was a sincere search for areas of common ground Gore said I found it an extremely interesting conversation and to be continued Gore said on MSNBC later on Monday that Ivanka Trump was very committed to having a climate policy that makes sense He said he would not disclose details out of respect for the privacy of the conversations and out of hopes to keep discussing the issue with the president elect Aides to Trump gave no further insight into Monday s meeting Vice President elect Mike Pence asked about the meeting as he left Trump Tower declined to comment He said Monday was another productive day on the transition After a day of meetings Trump left his home on Monday evening to have dinner with his family at 21 Club a New York restaurant Gore who shared the Nobel Peace Prize in 2007 for his work urging action against the risks of global warming was kicking off on Monday a 24 hour talk a thon to urge action in the battle against climate change which threatens to raise sea levels spread diseases and increase droughts in more regions around the world Trump was scheduled to meet on Tuesday with Rex Tillerson the chief executive of Exxon Mobil Corp NYSE XOM who is being considered for the job of secretary of state Trump takes office on Jan 20 Exxon Mobil has embraced the 2015 Paris Agreement that would lower global greenhouse gas emissions by between 26 percent and 28 percent from 2005 levels by 2025
An aide to Gore said Trump s team reached out to him after the former vice president said he intended to do everything he could to work with the president elect to ensure the United States remained a leader in the effort to address climate change |
XOM | Rudy Giuliani reportedly turned down homeland security secretary post | Investing com Former New York City Mayor Rudy Giuliani reportedly turned down President elect Donald Trump s offer to be named Secretary of Homeland Security holding out in an apparently unsuccessful negotiating tactic for an appointment as Secretary of State
Exxon Mobil Corporation NYSE XOM executive Rex Wayne Tillerson the oil giant s chairman president and CEO is now said to be the front runner for the Secretary of State position
President elect Trump has apparently said that Tillerson s stock is rising now that the two have conferred aides in New York City are letting it be known
The former New York City mayor s reliability has been questioned by Trump insiders who along with the president elect were disconcerted that Giuliani touted himself publicly as the best candidate for Secretary of State
Tillerson has experience running a large organization with operations in 50 countries and has been in talks with oil ministers at Iran giving him international experience
As a consequence of Giuliani s public lobbying including remarks at an event sponsored by The Wall Street Journal the Republican politician and former U S Attorney for the Southern District of New York City who prosecuted mafiosi and Wall Street white collar criminals in the 1980s has not been invited for a meeting at Trump Tower for about two weeks
Speaking this evening in Des Moines Iowa Trump continuing his thank you tour of the Midwest said that in filling my cabinet I am looking for people who are committed to fulfilling the common good
This appears to be a rebuke directly to Giuliani given the current context
We are building one of the great cabinets in U S history Trump claimed as part of an agenda that begins with bold structural reforms to create millions of jobs in agriculture or medicine or industry We ve got to prime the pump We ve got 96 million people out there discouraged long term unemployed They re going to have options They ll be able to pick their jobs not take whatever they can We ve got people who haven t worked for years They will be incentivized We will follow two simple rules Buy American and hire American
Trump said he believed the current U S unemployment rate of about 5 was a fiction as he noted that if one is unemployed for six months and cannot find a job one is dropped statistically from the rolls of the unemployed by the government |
XOM | Exxon CEO is now Trump s secretary of state favorite transition official | By Steve Holland GRAND RAPIDS Mich Reuters Exxon Mobil Corp NYSE XOM Chief Executive Rex Tillerson emerged on Friday as President elect Donald Trump s leading candidate for U S secretary of state a senior transition official said Trump met Tillerson on Tuesday and may talk to him again over the weekend the official said Trump appears to be in the final days of deliberations over his top diplomat with an announcement possible next week Tillerson s favored status was revealed as former New York Mayor Rudy Giuliani formally withdrew from consideration for secretary of state The transition official who spoke on condition of anonymity said Tillerson had moved ahead in Trump s deliberations over 2012 Republican presidential nominee Mitt Romney who has met Trump twice including a dinner in New York But the official said Romney was still under consideration for the job along with John Bolton a former U S ambassador to the United Nations U S Senator Bob Corker of Tennessee and retired Navy Admiral James Stavridis |
XOM | Trump likely to name Exxon CEO secretary of state source | By Steve Holland BALTIMORE Reuters U S President elect Donald Trump is expected to name the chief executive of Exxon Mobil Corp NYSE XOM as the country s top diplomat a source familiar with the situation said on Saturday an appointment that would put in place an official with close ties to the Russian government News of Rex Tillerson s possible appointment comes as U S intelligence analysts have concluded that Russia intervened in the 2016 election to help Trump win the White House The choice of Tillerson further stocks Trump s Cabinet and inner circle with people who favor a soft line toward Moscow Tillerson 64 has driven Exxon s expansion in Russia for decades and opposed U S sanctions imposed on Russia for its seizure of Crimea Russian President Vladimir Putin awarded Tillerson Russia s Order of Friendship one of the country s highest civilian honors Exxon s Tillerson emerged on Friday as Trump s leading candidate for U S secretary of state over 2012 Republican presidential nominee Mitt Romney and three other people Tillerson met with Trump for more than two hours at Trump Tower on Saturday morning It was their second meeting about the position this week The source who spoke on condition of anonymity said Tillerson was the expected pick but cautioned no formal offer had yet been made A senior official on the Trump transition team said the president elect was close to picking Tillerson Trump spokesman Jason Miller said no announcement on the high profile job was forthcoming in the immediate future Transition Update No announcements on Secretary of State until next week at the earliest MakeAmericaGreatAgain he tweeted Trump on Saturday attended the Army Navy football game in Baltimore where he was joined by former New York Mayor Rudy Giuliani who withdrew from consideration as secretary of state on Friday NBC News which first reported the development said Trump would also name John Bolton a former U S ambassador to the United Nations as deputy secretary of state As Exxon s CEO Tillerson oversees operations in more than 50 countries including Russia In 2011 Exxon signed a deal with Rosneft Russia s largest state owned oil company for joint oil exploration and production Since then the companies have formed 10 joint ventures for projects in Russia Tillerson and Rosneft chief Igor Sechin announced plans to begin drilling in the Russian Arctic for oil as part of their joint venture in spite of U S sanctions In July Tillerson was one of the highest profile U S representatives at the St Petersburg International Economic Forum one of Putin s main investment forums even as Washington had been taking a harder line than Europe on maintaining sanctions Trump has pledged to work for stronger U S ties with Russia which have been strained by Putin s incursion into Crimea and his support for Syrian President Bashir al Assad In a preview from an interview to be aired on Fox News Sunday Trump said Tillerson is much more than a business executive I mean he s a world class player Trump said He s in charge of an oil company that s pretty much double the size of his next nearest competitor It s been a company that has been unbelievably managed And to me a great advantage is he knows many of the players and he knows them well He does massive deals in Russia Trump said Tillerson s Russian ties figure to be a factor in any Senate confirmation hearing Senate Armed Services Committee Chairman John McCain a long time Putin critic told Fox News that he does not know what Tillerson s relationship with Putin has been but I ll tell you it is a matter of concern to me Democrats on the Senate Foreign Relations Committee raised concerns in a memo on Saturday citing Trump s cavalier dismissal of U S intelligence reports that Russia interfered in U S elections and the appointment of Tillerson who has business ties to Russia and Vladimir Putin and whose company worked to bury and deny climate science for years Should Tillerson be nominated climate change could be another controversial issue for him The company is under investigation by the New York Attorney General s Office for allegedly misleading investors regulators and the public on what it knew about global warming Tillerson is however one of the few people selected for roles in the Trump administration to believe that human activity causes climate change After Trump s election Exxon came out in support of the Paris Climate Agreement and said it favors a carbon tax as an emissions cutting strategy
The story is refiled to add Tillerson s given name in second paragraph |
CSCO | Top Stocks With Big Potential Catch Up Moves | Given the recent run up in the market last week here s a screen I ve been using recently for my own stock picking
First it focuses on the top Zacks Ranked Sectors and Industries Then it focuses on the Zacks Rank 1s 2s and 3s which are Strong Buys Buys and Holds respectively But then it selects the outperforming stocks with the smallest percentage price change over the last 4 weeks
Why would I do something like that
Here s why
You ve probably heard the old adage that roughly half of a stock s price movement can be attributed to the group that it s in And that s true In fact oftentimes even a mediocre stock in a top group will outperform a top stock in a poor group for this very reason
Now take a look at any top group You ll see plenty of fantastic stocks with some impressive price gains in there But not every stock in every group moves in lockstep at the exact same time Some will move more than others at any given time
So by focusing on the stocks with the smallest percentage price change with fundamentals that are just as good as those making the biggest price change you might find yourself getting into the stocks ready to make the biggest potential catch up move
Here s how to set up that screen
Best Zacks Ranked Sectors Best 8
We re screening for only those stocks with the best lowest average Zacks Rank With 16 sectors the best 8 sectors give us the best 50 of sectors
Best Zacks Ranked Industries Best 132
Next step is to get only the best Zacks Ranked Industries coming thru Since there are 264 X or expanded industries we look at the best 132 will give us the best 50 of industries But note that only the industries that also happen to be in the top sectors will get thru If an industry is ranked as one of the best but it s outside of the top sector rank it will not get thru
Zacks Rank less than or equal to 2
Now the screen gets narrowed down even more by looking at only the Zacks Rank 1s 2s Only Strong Buys and Buys can get through
Price and Avg Volume greater than or equal to 5 and 100 000 shares
Only stocks over 5 with at least an average of 100 0000 shares traded daily will be considered
Relative Price Change 4 Weeks greater than 0
This means we re screening for only those stocks that have outperformed the market S P 500 over the last 4 weeks
Change in Price 4 Weeks Bottom 50
Then finally we re scanning for the bottom 50 stocks with the lowest percentage price change over the last 4 weeks So while all of these stocks have outperformed the market they increased in price less than their peers
So each one of these stocks is in a top Sector and top Industry within that Sector This alone will tip the odds of success in your favor by a great deal when you consider that the best Zacks Ranked groups outperform the worst ones by a factor of 2 to 1
Then by selecting those stocks with the best Zacks Rank along with the best price performance over the last 4 weeks you now have only a list of winners from which to choose from
And from that list of winners we re selecting the ones that have gained less than their peers on that list Remember these stocks aren t dogs or unresponsive stocks Quite the contrary they have all outperformed the market It just so happens that they increased less than the others on the list But because they are a top rated stock in a top rated industry we ve singled these out as the ones that could make the biggest move to catch up to the others
It s an interesting screen that has generated a lot of great names
Here are 5 from that list
Cisco Systems NASDAQ CSCO Cardiovascular Systems Five9 Inc Generac Holdings Nxstage Medical
All great looking stocks that seem to have lots more upside in store for them
Get the rest of the stocks on the list and start putting this and other ideas to the test It can all be done with the Research Wizard stock picking and backtesting software
Want more articles from this author Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published
Disclosure Officers directors and or employees of Zacks Investment Research may own or have sold short securities and or hold long and or short positions in options that are mentioned in this material An affiliated investment advisory firm may own or have sold short securities and or hold long and or short positions in options that are mentioned in this material
Disclosure Performance information for Zacks portfolios and strategies are available at |
CSCO | Your Two Minute Earnings Preview For Cisco Systems CSCO Stock | Today we are taking a quick look at Cisco Systems NASDAQ CSCO ahead of their earnings release later in the week This company finds itself in a top notch industry and shares have been moving higher to start November but can it keep the trend going following its earnings release
Well there are definitely some reasons to believe that CSCO can stay on its solid trajectory and especially if you consider Cisco s top 34 industry rank Additionally the company just moved up into Zacks Rank 2 Buy territory within the past week largely thanks to rising earnings estimates
If that wasn t enough investors should also note that CSCO has a good fundamental grade of B while it hasn t missed earnings estimates in the past five years In other words the deck seems stacked for another beat from CSCO this week so look for the outlook and growth projections to weigh on shares more than anything CISCO SYSTEMS Price Consensus and EPS Surprise
Cisco Systems reports after the bell on 11 16 and we are looking for earnings of 0 54 per share Make sure to watch the video for a quick guide to CSCO stock heading into the report but if you want to learn more about trading in earnings season check out our Zacks Live Trader below for additional information on ways to use options to trade stocks around their quarterly reports
Confidential from ZacksWould you like to access Zacks 2 best trades that are not available to the public Zacks Executive VP Steve Reitmeister knows which of our experts has the hottest hand and when key trades are about to be triggered Today he is prepared to pass the Best of Our Best along to you |
XOM | TOTAL Invests In United Wind Expands Renewable Portfolio | TOTAL S A TO TOT an integrated oil gas company announced a buying of interest by its venture capital unit Total Energy Ventures TEV in United Wind United Wind is in the business of leasing small wind turbines 10 to 100 kW to rural businesses and homes in the United States The power generated by the wind turbines is either used by the customers of United Wind or sold to the grid As a result customers leasing these turbines have to pay much less for their energy use than if they were to buy it from the utility companies This makes United Wind an attractive option Now with TOTAL acquiring an interest in United Wind there will be further expansion of its business TOTAL s Renewable GoalTOTAL is focused on expanding its renewable energy business But TOTAL also has a flourishing global oil and gas operation which is well poised to benefit from the rebound in crude oil prices in the second quarter of 2016 Per an International Energy Agency IEA report the contribution of renewable energy to the entire electricity generation mix will go up to 22 in 2035 from 8 in 2015 TOTAL is also focused on expanding its renewable assets in line with the IEA s projection TOTAL aims to add 20 low carbon businesses in 20 years time In other words renewable energy along with energy storage and energy efficiency should represent 20 of its entire portfolio in the next couple of decades TOTAL FINA SA Price TOTAL s Renewable VenturesWe note that TOTAL already has a strong presence in the renewable energy space through its subsidiary SunPower Corporation NASDAQ SPWR In addition its robust financial position allows it to make further acquisitions in renewables In May 2016 TOTAL decided to invest nearly 1 1 billion to acquire Saft Group a maker of batteries for the industrial transportation and civil and military electronics markets The acquisition is in sync with TOTAL s energy storage business expansion Oil Gas Majors Showing InterestApart from TOTAL other oil gas majors are also showing an interest in diversifying into the booming renewable energy space given the positive regulatory framework In May 2016 Exxon Mobil Corporation NYSE XOM entered into an agreement with FuelCell Energy Inc NASDAQ FCEL to jointly pursue power plant carbon dioxide capture using a novel technology involving a new application of carbonate fuel cells The new technology could substantially reduce costs compared to what commercial technology offers through a unique process that generates power while capturing carbon The aim is to apply the technology globally on a large scale Zacks RankTOTAL S A currently has a Zacks Rank 3 Hold Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days |
PCG | PG E reports another outage on morning when California fire started | NEW YORK Reuters California utility PG E Corp N PCG facing investor concerns over its possible role in the deadly Camp Fire in Northern California has reported another power line outage that it experienced on the morning of Nov 8 when the blaze started The incident report which was filed on Friday with the safety division of the California Public Utilities Commission CPUC said a line near the area of Concow in Butte County suffered an outage at 6 45 a m on Nov 8 The information in the report is preliminary according to a spokesman for PG E who said the company was cooperating with any investigations The utility has said it could face liability that exceeds its insurance coverage if its equipment were found to have caused the Camp Fire The cause of the blaze which was 60 percent contained on Sunday is under investigation In a previous regulatory report PG E which operates in the northern part of California said it experienced an outage on a transmission line on the morning of Nov 8 near the town of Pulga near where the fire is thought to have started Authorities were still searching for signs of the 1 276 people listed as missing after the Camp Fire tore through the mountain town of Paradise The remains of 76 people have been recovered so far in what is considered the state s deadliest ever wildfire A CPUC spokesman confirmed that the agency received the second report on Friday and said the incident would be incorporated into its investigation to assess the compliance of electric facilities with applicable rules and regulations in fire impacted areas Investors are watching for clues about whether California s government will step in to save PG E should it eventually be found responsible for the fire and should any potential liability exceed the utility s resources CPUC President Michael Picker told Reuters on Friday that utilities must be able to borrow money cheaply in order to properly serve ratepayers Similar comments from Picker a day earlier caused PG E s stock to surge in after hours trading
The company s stock had slumped more than 60 percent since the wildfire broke out on fears that without help from California s government the utility could go bankrupt should it eventually be found responsible |
PCG | Californians left homeless by wildfire brace for heavy rain | By Jonathan Allen Reuters Heavy rains were due to create new problems for residents of Northern California late on Tuesday raising the risk of mudslides in an area where people left homeless by the state s deadliest wildfire remain huddled in parking lot encampments State and federal officials warned people to be alert to the risk of sudden flows of debris down the scorched denuded slopes of the foothills of the Sierra Nevada mountains where the Camp Fire has killed at least 79 people since breaking out on Nov 8 There are people still living in tents Eric Kurth a meteorologist in the National Weather Service s Sacramento office said in a telephone interview That s certainly not going to be pleasant with the rain and we might get some wind gusting up to 40 to 45 miles per hour 64 to 72 kph The risk of debris slides could be lessened if the forecasted 4 to 6 inches 10 to 15 centimeters of rainfall was spread out over several days rather than in more intense bursts he said The rain also would extinguish some of the flames and dislodge some of the toxic smoke Kurth said We re really expecting the air quality to improve That s the bright side for those people up there he said The fire largely obliterated the town of Paradise a community of nearly 27 000 people about 175 miles 280 km north of San Francisco The Butte County Sheriff s Office has tentatively identified 64 of the 79 victims Meanwhile the missing persons list compiled by the sheriff s office was revised downward to 699 names on Tuesday from nearly 900 on Monday The number of unaccounted people has fluctuated dramatically in the past week as more were reported missing or as some initially listed as unaccounted for either turn up alive or are confirmed dead As of early Tuesday the fire had torched more than 151 000 acres 61 100 hectares of parched scrub and trees and incinerated about 12 000 homes Cal Fire said Containment lines have been built around 70 percent of its perimeter according to Cal Fire Smoke from the fire has led to school closures in the region Citing poor air quality schools and colleges in the Sacramento area will remain closed until Nov 26 Many flights in and out of San Francisco have been delayed or canceled because of the smoke WET CONCRETE The rain was expected to make it more difficult for teams search through ash and debris for human remains Intense fire over the slopes of canyons hills and mountains makes them more prone to landslides by burning away vegetation and organic material that normally holds soil in place The fire also creates a hard waxy surface that tends to repel rather than absorb water The result can be heavy runoff of rainwater mixed with mud boulders trees and other debris that flows downhill with tremendous force said Jason Kean a research hydrologist for the U S Geological Survey Those debris flows have the consistency of wet concrete and move faster than you can run he said It s like a flood on steroids and a big one can take out two story buildings The number of residents needing temporary shelter was unclear but as many as 52 000 people were under evacuation orders at the height of the firestorm last week Nearly 500 miles south of Paradise near Malibu west of Los Angeles at least 2 inches 5 cm of rain are expected to fall on a second fire the Woolsey which has killed three people That blaze was 96 percent contained as of Monday evening The cause of both fires is under investigation but electric utilities reported localized equipment problems around the time they broke out
PG E Corp N PCG has said it could face liability that exceeds its insurance coverage if its equipment were found to have caused the Camp Fire |
PCG | PG E PCG Expected To Beat Earnings Estimates Can The Stock Move Higher | PG E PCG is expected to deliver a year over year decline in earnings on higher revenues when it reports results for the quarter ended December 2018 This widely known consensus outlook gives a good sense of the company s earnings picture but how the actual results compare to these estimates is a powerful factor that could impact its near term stock price
The stock might move higher if these key numbers top expectations in the upcoming earnings report which is expected to be released on February 28 On the other hand if they miss the stock may move lower
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management s discussion of business conditions on the earnings call it s worth handicapping the probability of a positive EPS surprise
Zacks Consensus Estimate
This utility holding company is expected to post quarterly earnings of 0 62 per share in its upcoming report which represents a year over year change of 1 6
Revenues are expected to be 4 29 billion up 4 5 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has remained unchanged over the last 30 days This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out Our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction has this insight at its core
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for PG E
For PG E the Most Accurate Estimate is higher than the Zacks Consensus Estimate suggesting that analysts have recently become bullish on the company s earnings prospects This has resulted in an Earnings ESP of 3 23
On the other hand the stock currently carries a Zacks Rank of 3
So this combination indicates that PG E will most likely beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
While calculating estimates for a company s future earnings analysts often consider to what extent it has been able to match past consensus estimates So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that PG E would post earnings of 1 12 per share when it actually produced earnings of 1 13 delivering a surprise of 0 89
Over the last four quarters the company has beaten consensus EPS estimates two times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
PG E appears a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
PCG | PG E Corporation PCG Q4 Earnings Beat Revenues Decline | PG E Corporation NYSE PCG a diversified utility holding company engages in the business of electricity and natural gas distribution electricity generation procurement and transmission and natural gas procurement transportation and storage Stable financial position steady growth in customer counts a well set of utility assets and disciplined investments in infrastructure projects will likely boost PG E Corp s future performance In addition the company s practice of paying dividend is commendable However penalties levied for the San Bruno and Carmel incidents stringent environmental regulations and several operational risks remain potential setbacks Estimate Trend Surprise HistoryInvestors should note that the fourth quarter Zacks Consensus Estimate for earnings of 62 cents per share has remained stable over the last 7 days Coming to the earnings surprise PG E Corporation has surpassed the Zacks Consensus Estimate in two of the last four quarters resulting in a positive average surprise of 0 66 Zacks Rank Currently PG E Corporation has a Zacks Rank 3 Hold but that could change following its fourth quarter 2018 earnings report which has just released You can see We have highlighted some of the key details from the just released announcement below Earnings PG E Corporation exceeded earnings estimate by 29 Operating earnings per share came in at 80 cents compared with the Zacks Consensus Estimate of 62 cents Revenue Revenues of 4 088 million missed the Zacks Consensus Estimate of 4 285 million Stock Price It would be interesting to see how the market reacts to the fourth quarter earnings beat during the trading session today Check back later for our full write up on this PG E Corporation earnings report later Zacks Top 10 Stocks for 2019In addition to the stocks discussed above would you like to know about our 10 finest buy and holds for the year Who wouldn t Our annual Top 10s have beaten the market with amazing regularity In 2018 while the market dropped 5 2 the portfolio scored well into double digits overall with individual stocks rising as high as 61 5 And from 2012 2017 while the market boomed 126 3 Zacks Top 10s reached an even more sensational 181 9 |
XOM | Obama administration bars new oil exploration in Arctic waters | By Timothy Gardner WASHINGTON Reuters The Obama administration on Friday blocked new exploration for oil and gas in Arctic waters in a win for environmental groups that had fought development of the ecologically fragile region The Department of the Interior released a 2017 to 2022 leasing plan that blocked drilling in the Chukchi and Beaufort Seas off northern Alaska It also limited petroleum development in the Cook Inlet off south central Alaska Environmental activists have battled drilling in Alaska to protect whales walruses and seals and as part of a broader movement to keep remaining fossil fuels in the ground The Interior Department said the plan was balanced and left 70 percent of economically recoverable oil and gas resources open to drilling mostly in the Gulf of Mexico The plan focuses on the best areas with the highest resource potential lowest conflict and established infrastructure and removes regions that are simply not right to lease Interior Secretary Sally Jewell said President Barack Obama who last year became the first sitting president to cross the Arctic Circle has made fighting climate change and protecting the Arctic priorities in his administration But President elect Donald Trump a Republican who takes office on Jan 20 2017 has vowed to open resources to petroleum development and could take steps to reverse the decision Oil interests have pressured the administration to explore for energy in the Arctic Jack Girard the head of the American Petroleum Institute industry group said the decision puts the U S at a serious competitive disadvantage Russia and Norway have also explored the Arctic though Exxon Mobil NYSE XOM wound down drilling in the Russian north in 2014 due to U S sanctions over Moscow s aggression in eastern Ukraine Fierce winds and frigid waters make the Arctic treacherous for drilling equipment After spending billions of dollars to explore the Alaskan Arctic Royal Dutch Shell LON RDSa retreated in 2015 after suffering a gash in one of its ships and environmentalists had uncovered details of an old law that forced the company to cut exploration there by half The U S Coast Guard complained when Shell was drilling off Alaska that it had been forced to divert resources including a vessel that fought cocaine trafficking to keep operations in the region safe Environmentalists applauded the new lease plan which built on a similar decision in March when the government removed much of the Atlantic ocean from oil and gas leasing for five years This is excellent news for our oceans from the Arctic to the Atlantic said Jacqueline Savitz deputy vice president for U S campaigns of Oceana an international advocacy group |
XOM | Texas judge orders Massachusetts AG deposition in Exxon climate lawsuit | A U S federal judge in Dallas today ordered the Massachusetts attorney general to appear for a deposition in ExxonMobil s NYSE XOM lawsuit over the state s investigation into the company s climate change records New York s attorney general who is running a parallel investigation into XOM was added to the company s lawsuit last week and is fighting to avoid being deposed but was advised today by the judge to also appear in Dallas XOM is seeking an injunction barring the enforcement of subpoenas the AGs issued demanding documents relating to climate change research and investor communications stretching back decades We have no choice but to defend ourselves against politically motivated investigations that are biased in bad faith and without legal merit XOM says A former Maryland attorney general who is not involved in this case calls unprecedented the judge s move to allow a company under investigation by a state to sue and win permission to question law enforcement officers |
XOM | Five years after the boom battle rages over mining wages in Australia | By Jonathan Barrett and Aaron Bunch SYDNEY PERTH Reuters Coal prices may be recovering but there are no celebrations in the mining town of Collie Western Australia where workers are fighting Indian conglomerate Lanco Infratech NS LAIN over plans to slash their wages almost in half The move to cut pay at Lanco s Griffin Coal mine comes five years after the peak of a commodity price boom that saw miners truck drivers and even cleaners earning six figure incomes in Australia s remote outback mines and offshore oil and gas fields But unwinding the wage hikes has proved difficult after a collapse in prices for coal iron ore and other resources pushed dozens of mining companies into bankruptcy and many more to the brink Lanco s move to switch from an employee friendly wage agreement to statutory minimum pay when the agreement expired is among the first of its kind and has quickly become a national test case China s Yanzhou Coal Mining Co 600188 SS and U S giant Exxon Mobil Corp N XOM are among other companies pursuing controversial changes to wages and conditions While lower wages will help struggling projects survive some economists worry widespread cuts to worker incomes will weigh on consumer spending and economic growth Australian wages are growing at their slowest pace on record the Australian Bureau of Statistics data for the September quarter shows representing less than half the wage growth rate workers enjoyed a decade ago Workers in Collie believe the wage cuts will have devastating consequences for their tight knit town of about 7 000 residents Graham Latham who retired from Griffin Coal in July because he was unhappy with the new pay rate and job conditions said businesses including a hardware store camera shop and fashion boutique have already shut their doors When I first started at out there it felt like a family atmosphere but now you just feel like a number you know he said WAGE RECLAIM A KPMG report for lobby group the Australian Mines and Metals Association AMMA has found wages in the iron ore industry are 20 percent higher in Australia than in competing jurisdictions and offshore vessel operators are paid 2 1 2 times more During the boom time miners regularly paid dump truck drivers high six figure salaries while travel arrangements allowed some workers to live in holiday areas such as the Indonesian island of Bali during their breaks Nicholas Ellery partner in legal firm Corrs Chambers Westgarth said the severity of the wage cuts was a result of these high wages and incentives many people enjoyed in stronger economic times Businesses are just trying to find ways to survive and stay viable Ellery said This is happening across sectors and while industries are doing it tough we ll see more of it Companies including Fortescue Metals Group AX FMG have changed shift rosters and penny pinching from cutting back on soap and bottled water at mines has become commonplace Still around 46 000 mining construction jobs were lost between 2013 and 2015 according to National Australia Bank data Coal prices have surged this year but projects run by Lanco and Yanzhou s local arm also in Collie operate on longer term contracts and have yet to see higher prices feed through Griffin has lost an average A 48 9 million 36 2 million a year since 2011 according to court filings There is a significant gap between the cost of production and the income received for selling each tonne of coal Griffin s chief financial controller James Riordan told Reuters Labor costs are by far the biggest cost of production A spokesman for Yanzhou s local coal operations said the company had been negotiating since early last year without success The proposed 15 percent reduction is unfortunately reflective of the difficult economic and operating conditions we are continuing to address at this time the spokesman said in a statement COMPANIES IN BOX SEAT Lanco s successful bid in Australia s industrial relations tribunal to return workers to an industry minimum has set a precedent that other companies are now holding over their work forces during negotiations said unionist Steve McCartney Companies think this is a green light to attack wages and conditions for workers all over Australia said McCartney Our people in Collie are digging in Some Griffin maintenance workers are facing a potential pay cut from around A 130 000 a year to A 80 000 although negotiations with the company are ongoing Exxon Mobil subsidiary Esso wants to move workers at its oil platform operations in the Bass Strait fields south of Australia s mainland from one week on one week off shifts to two weekly shifts designed to improve productivity It has started proceedings to move workers onto award wages although an agreement could be reached in the interim An Esso spokesman declined to comment Jane Beauglehole a long term resident of Collie and wife of a worker at Lanco s operations said industry minimum wages would affect all aspects of family life Work is saying We ve got counselors you can use come use them said Beauglehole And I say a workforce shouldn t need counselors to help the workers because it should be a happy place to work in
1 1 3524 Australian dollars |
XOM | More company climate votes ahead as Trump may loosen energy rules | By Ross Kerber BOSTON Reuters Activist shareholders plan a record number of resolutions focused on climate change at U S company annual meetings in 2017 even as President elect Donald Trump looks set to loosen environmental regulations Based on filings so far U S companies are on track to face roughly 200 resolutions on climate matters at their shareholder meetings next year according to Rob Berridge who follows the subject for Ceres a sustainability advocacy group There were 174 such resolutions this year Berridge said compared with 167 in 2015 and 148 in 2014 Many have been directed at big oil and gas companies though other sectors have also been targeted including technology and retail Activist shareholders broadly aim to curb companies carbon emissions and make energy usage more efficient or at the very least to draw the attention of companies and investors to climate change as an urgent problem They have had some limited success Investors at Exxon Mobil Corp NYSE XOM the world s largest publicly traded oil producer passed a measure this year that could lead to an environmental activist joining its board Our position is that the risk of climate change is clear and warrants action said Exxon spokesman Alan Jeffers The rising number of shareholder votes reflects a growing concern among big investors about the environment encouraged by steps by some boards to embrace reforms Deadlines are fast approaching to get resolutions on the ballot for shareholder meetings to be held in the spring The election victory of Trump who is set to take over as U S president on Jan 20 only seems to have added impetus On the campaign trail Trump dismissed human caused climate change as a hoax and pledged to dismantle the Environmental Protection Agency He also threatened to withdraw the United States from the landmark 2015 Paris Agreement to combat climate change although he appeared to step back from that position on Tuesday He vowed instead to revive the U S coal industry encourage oil drilling and to scale back regulation of the energy sector Despite what the administration may or may not do I really believe that corporations understand the risks posed by climate change said Danielle Fugere president of As You Sow a California nonprofit campaign group It sponsored 18 climate related shareholder resolutions in 2016 and expects to file a bigger number next year One resolution for 2017 calls on Anadarko Petroleum Corp NYSE APC to report on how it would address the risk of so called stranded assets such as high cost deepwater project investments that might be caused by a drop in demand for oil and gas The idea won support from 42 percent of shares voted at the company s 2016 meeting up from 29 percent in 2015 Anadarko s board last year called the idea unnecessary and unproductive Spokesman John Christiansen said it is reviewing the proposal To be sure among S P 500 companies investor support for climate resolutions has been relatively weak holding steady around 22 percent since 2014 according to research firm Fund Votes But activists often won more backing for ideas such as urging companies to report on their strategy for dealing with climate change according to the Sustainable Investments Institute a research firm specializing in shareholder votes supported by universities pension funds and other institutional investors Anne Simpson director of sustainability for the California Public Employees Retirement System Calpers which manages about 300 billion said it plans to file or back resolutions at U S oil and gas companies for 2017 though she declined to discuss specifics Last year the boards of mining companies including Rio Tinto LON RIO Plc and Glencore LON GLEN Plc endorsed resolutions Calpers submitted calling for reports on climate risk and the measures passed by wide margins More companies will likely embrace shareholder proposals to head off disruption caused by climate change Simpson said
Economics is driving this not politics she said |
XOM | Exclusive Foreign firms hit by tax demands rethink Tanzanian expansion | By Katharine Houreld
DAR ES SALAAM Reuters Some of Tanzania s biggest foreign investors say they could scale back their operations or expansion plans because of tougher demands placed on companies including higher tax bills as part of the president s drive to overhaul the economy
At least six companies are rethinking their business and investment plans according to Reuters interviews with senior executives at a dozen of the biggest foreign firms operating in Tanzania or their local arms in sectors including mining telecoms and shipping
Three said they could scale back operations in the East African nation two said they planned to expand in other countries on the continent instead while one said it was in the process of withdrawing from Tanzania altogether
The companies asked not to be named due to the sensitivity of the matter and because their plans have not been made public
One firm had not yet made a decision on how to respond to the government reforms while five companies said their plans were unaffected including two involved in giant projects a 30 billion LNG plant and a 3 billion fertilizer plant
Tanzania is more reliant on foreign direct investment than many other regional countries given the size of its economy It received just over 1 5 billion last year into an economy valued at under 45 billion according to figures from the U N Conference on Trade and Investment and the World Bank
Neighboring Kenya with a 61 billion economy received slightly less than Tanzania while South Africa with a 313 billion economy received 1 7 billion
President John Magufuli nicknamed the Bulldozer for his infrastructure projects and pugnacious leadership style launched his reform drive after he was elected last year promising to transform an economy hobbled by red tape and corruption and carry out a major building program
A strict new tax regime tops the list of companies complaints Magufuli s government imposed tax hikes this year on mobile money transfers banking tourism services and cargo transit services In some cases businesses say they were warned by regulators not to pass the cost on to consumers
Tax revenues for the 2014 2015 financial year totaled 9 8 trillion shillings 4 5 billion In 2016 2017 the target is 15 1 trillion a jump of more than 50 percent
LEVEL PLAYING FIELD
Many of the executives interviewed by Reuters said they were frustrated by increased tax demands that they say do not properly correspond to their incomes
A local franchisee for a global brand said it was in the process of leaving the country after a tax bill this year that topped its combined sales for the past five years It said it had already sold one outlet and closed another
An executive whose company has invested hundreds of millions of dollars in the country said he was now looking at expanding in Kenya or Mali rather than Tanzania partly due to the new tax demands
The government says teething problems with new measures will give way to a fairer stronger economy and says it is natural for businesses to feel unsettled during periods of change
There have been some complaints but we hear them and we have an open door said Adolf Mkenda permanent secretary at the Ministry of Industry Trade and Investment
We are just making sure everyone pays what they should We are creating a fair and level playing field
Richard Kayombo director of the Tanzania Revenue Authority TRA said increased tax income was needed to pay for new infrastructure in the country The TRA won nine out of 10 recent tax cases in court which showed their bills were fair he added
SILVER AND GOLD
The government has also told mining companies to build smelters to refine copper silver and gold mixed ore in Tanzania to create jobs but executives say there is not enough such ore in Tanzania to make this economically viable
Major foreign firms active in Tanzania include energy firms Statoil OL STL Royal Dutch Shell L RDSa Exxon Mobil N XOM and Ophir Energy L OPHR engineering firms Ferrostaal Industrial Projects and Haldor Topsoe telecoms companies Millicom ST MICsdb Airtel NS BRTI and Vodacom J VODJ mining firms Anglo Gold Ashanti J ANGJ and Acacia Mining L ACAA and shipping firms such as Maersk
Executives in the telecoms and mining sectors which each account for about 4 percent of Tanzanian GDP are concerned by legal requirements to list large chunks of their businesses on the local stock exchange saying it is unclear if there is enough liquidity
Magufuli says the listing move will bring more transparency and offer the public a share in the industries profits
Businesses have longed for a shake up of an economy which had lagged East African neighbors for decades Recent years saw strong annual growth of about 7 percent but it comes from a low base and Kenya next door still has a bigger economy despite having less land and fewer people
But executives say Magufuli s government risks undermining its economic plans by turning away vital investment and jobs from the poor nation Some are also worried by recent moves that included banning opposition rallies placing heavy restrictions on the media and ending parliamentary broadcasts
Most companies however welcome the president s moves to clamp down on corruption in government and business which have included him sacking scores of officials
John Corse CEO of regional airline FastJet said the crackdown had meant officials were now more helpful and available but the reduction in the amount of money circulating had forced him to cut his fleet from five planes to two
Prevalent corruption did create cash swirling around and that s been taken away he said |
CSCO | What s In The Cards For Five9 FIVN This Earnings Season | Five9 Inc NASDAQ FIVN is set to report third quarter 2016 results on Nov 1 Last quarter the company posted a loss of 7 cents per share which was narrower than the Zacks Consensus Estimate of a loss of 11 cents Moreover the company has outperformed the Zacks Consensus Estimate in all of the four trailing quarters with an average positive surprise of 29 13
Let s see how things are shaping up for this announcement
Factors to Consider
Five9 offers a virtual contact center cloud platform that acts as a hub for interaction between clients and customers This facilitates contact center operations focused on inbound or outbound customer interactions within a single unified architecture The company offers software products such as workforce management speech recognition predictive dialer and voice applications
The cloud based contact center solution industry has been witnessing growth over the past several quarters as organizations are looking for ways to minimize costs and improve customer support We believe that Five9 has been capitalizing on this opportunity which should be reflected in its to be reported quarter
Furthermore the company s sustained focus on expanding its product portfolio will aid its top line performance
However intensifying competition from small and large players like Cisco Systems NASDAQ CSCO is likely to dent Five9 s third quarter performance FIVE9 INC Price and EPS Surprise
Earnings Whispers
Our proven model does not conclusively show that Five9 is likely to beat the Zacks Consensus Estimate in the upcoming release This is because a stock needs to have both a positive and a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold for this to happen Unfortunately that is not the case here as elaborated below
Zacks ESP The Earnings ESP for Five9 is 10 00 This is because the Most Accurate estimate stands at a loss of 11 cents while the Zacks Consensus Estimate is pegged at a loss of 10 cents Please check our that enables you to find stocks that are expected to come out with earnings surprises
Zacks Rank Though Five9 s Zacks Rank 1 increases the predictive power of ESP the company s negative ESP makes surprise prediction difficult
Note that we caution against stocks with Zacks Rank 4 or 5 Sell rated stocks going into the earnings announcement especially when the company is seeing a negative estimate revisions momentum
Stocks to Consider
Here are a couple of companies which as per our model have the right combination of elements to post an earnings beat this quarter
Boyd Gaming Corp NYSE BYD with an Earnings ESP of 16 67 and a Zacks Rank 2 You can see
NVIDIA Corp NASDAQ NVDA with an Earnings ESP of 8 93 and a Zacks Rank 3
Confidential from Zacks
Beyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
XOM | Norway Oil Workers Enters Into Wage Deal Averts Strike | Norwegian Oil and Gas Association NOG reported that its members comprising employers have entered into a new wage deal with oil well service workers ending the ongoing impasse With the tussle over wages the industry was risking a strike right when crude prices have started showing a recovery Wage Deal Saves Norwegian Oil IndustryThe deal is important for crude the dwindling fortunes of which had earlier cast a pall over Western Europe s biggest oil producing nation Norway As per data compiled by the Norwegian Petroleum Directorate the strike would have hurt the nation s output by about 7 Five fields operated by energy majors Exxon Mobil Corp NYSE XOM Engie and BASF SE DE BASFN would have been the most affected Our apprehension stems from the fact that Norway is a major player in the oil and gas global arena According to the Energy Information Administration which provides official energy statistics on behalf of the U S Government Norway is Europe s largest petroleum liquids producer the world s third largest natural gas exporter and an important supplier of both liquids and natural gas to other European countries The Baltic nation is also the largest oil producer and exporter in Western Europe The country is also has a favorable geographical position to fulfill European needs via its extensive export pipeline infrastructure while the rest is exported as liquefied natural gas Oils Energy Sector Price IndexBackdropThe energy space in the Baltic nation also witnessed stiff wage negotiations from unions in the recent past that hurt the stability of the industry To blunt the impact of receding returns major players in the Norwegian space are steadily shifting their focus to another relatively unexplored area in the Arctic the Russian maritime borders Licenses are about to be doled out for this area known as Barents Sea Southeast Experts believe drilling could begin in the area as soon as in 2017 To add to the woes of oil and gas majors having a substantial stake in Norway the country is witnessing political pressure to force offshore producers to power offshore North Sea projects from clean sources in land This is greatly contested by the energy majors lobby Norwegian Oil and Gas Association comprising prime foreign names like BP Plc NYSE BP and Exxon Mobil which have a considerable stake in Norway Our apprehension also rises from the fact that forcing offshore projects to procure power from land based clean sources is bound to increase project costs Finally we feel that the stable functioning of the Norwegian oil and gas industry is vital to the U S given that the fate of crude is still hanging in a balance After all in 2008 West Texas Intermediate WTI crude futures hit a record high of more than 145 per barrel Currently however WTI is hovering around only 47 per barrel Investors interested in the broader energy sector can profit in the near term from Zacks wisdom and invest in Zacks Rank 1 Strong Buy stocks like World Fuel Services Corp NYSE INT and Tallgrass Energy GP LP NYSE TEGP |
XOM | Exxon Qatar Petroleum Looking For Assets In Mozambique | ExxonMobil Corporation NYSE XOM and Qatar Petroleum have joined forces to search for energy assets in Mozambique per sources familiar with the matter Mozambique houses some of the biggest natural gas discoveries in a generation The area includes Area 1 discovery made by Anadarko Petroleum Corporation NYSE APC and Eni SpA s TO E discovery in Area 4 both in the Rovuma Basin Both these companies intend to export the gas as LNG but have not reached the final investment decision Per the sources both ExxonMobil and Qatar Petroleum are contemplating farming in to gas fields owned by Anadarko and Eni However no final decision has been taken yet The discoveries made offshore the northern coast of Rovuma Basin have drawn interest from oil companies in Europe the U S and China This is mainly because the Mozambique is planning one of the world s largest liquefied natural gas projects STATOIL ASA ADR Price ExxonMobil and Qatar Petroleum have enjoyed a long standing relationship with several collaborations over the last 15 years Hence the latest investment jointly made by the two companies is likely to infuse the much needed funds for development along with a tax windfall to a nation struggling with a intensifying debt crisis None of the companies disclosed any detail with respect to these developments ExxonMobil s partnership with Qatar also includes the RasGas which produces and liquefies gas from Qatar s North field and the Golden Pass LNG terminal in Texas ExxonMobil won three offshore exploration licenses in Oct 2015 for blocks lying south of the Anadarko and Eni discoveries and thus already has a presence in Mozambique The U S oil giant also has a working interest in Statoil OL STL ASA s NYSE STO Block 2 in Tanzania north of the Rovuma Basin ExxonMobil s acquisition of an equity interest in Anadarko s Area 1 is likely to generate capital gains tax of about 1 3 billion for the Mozambique government This will lend a huge support to the country that is struggling to balance its books after 1 4 billion of hidden debt was disclosed in April which led to the World Bank and other donors to suspend aid ExxonMobil holds a Zacks Rank 2 Buy |
PCG | PG E options traders bet stock not out of the woods yet | By Saqib Iqbal Ahmed NEW YORK Reuters The wild swings in the shares of PG E Corp N PCG over the past week have drawn a rush of trading in the electricity provider s options contracts and traders are betting the stock is going to remain prone to wild gyrations in the near term Shares of the electricity provider in the northern California region ravaged by a deadly wildfire jumped 36 percent on Friday Fears of bankruptcy stemming from the utility s potential liability from the fire eased amid signs of support from one regulator for the company The stock has shed about half its value over the last week and its bonds came under intense pressure In the options market trading volume jumped to a record high this week with more than 50 000 contracts changing hands on average daily data from New York based options analytics firm Trade Alert showed While the majority of the trading over the last few days was due to investors rushing to load up on protection as the shares plunged trading sentiment on Friday was more mixed with some traders betting on a rebound in the shares Investors expectation for volatility however remained elevated Some of the concerns have eased but options traders expect the volatility to continue in the short term said Fred Ruffy options analyst at Trade Alert The stock is certainly not out of the woods yet Investors are watching for clues about whether California state officials will intervene should PG E be found responsible for the Camp Fire The California Public Utilities Commission issued a statement on Thursday saying that state law requires it to consider a utility s financial health when weighing a request to cover costs associated with wildfires Still even if PG E dodges bankruptcy it was not immediately clear that PG E shareholders would not take a hit The regulator also said it would be examining PG E s corporate governance structure and operations as part of an existing investigation of the company s safety culture
On Friday options trading volume was active with about 40 000 contracts traded by 11 30 a m 1630 GMT |
PCG | PG E PCG Expected To Beat Earnings Estimates What To Know Ahead Of Q4 Release | Wall Street expects a year over year decline in earnings on higher revenues when PG E PCG reports results for the quarter ended December 2018 While this widely known consensus outlook is important in gauging the company s earnings picture a powerful factor that could impact its near term stock price is how the actual results compare to these estimates
The stock might move higher if these key numbers top expectations in the upcoming earnings report which is expected to be released on February 8 On the other hand if they miss the stock may move lower
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management s discussion of business conditions on the earnings call it s worth handicapping the probability of a positive EPS surprise
Zacks Consensus Estimate
This utility holding company is expected to post quarterly earnings of 0 62 per share in its upcoming report which represents a year over year change of 1 6
Revenues are expected to be 4 29 billion up 4 5 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has remained unchanged over the last 30 days This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out This insight is at the core of our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is subject to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for PG E
For PG E the Most Accurate Estimate is higher than the Zacks Consensus Estimate suggesting that analysts have recently become bullish on the company s earnings prospects This has resulted in an Earnings ESP of 1 61
On the other hand the stock currently carries a Zacks Rank of 3
So this combination indicates that PG E will most likely beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that PG E would post earnings of 1 12 per share when it actually produced earnings of 1 13 delivering a surprise of 0 89
Over the last four quarters the company has beaten consensus EPS estimates two times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
PG E appears a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
PCG | PG E PCG Outpaces Stock Market Gains What You Should Know | PG E PCG closed the most recent trading day at 13 08 moving 0 62 from the previous trading session This move outpaced the S P 500 s daily gain of 0 09 Elsewhere the Dow gained 0 26 while the tech heavy Nasdaq lost 0 25
Coming into today shares of the utility holding company had lost 45 72 in the past month In that same time the Utilities sector gained 5 89 while the S P 500 gained 7 92
PCG will be looking to display strength as it nears its next earnings release which is expected to be February 8 2019 The company is expected to report EPS of 0 62 down 1 59 from the prior year quarter Meanwhile the Zacks Consensus Estimate for revenue is projecting net sales of 4 29 billion up 4 51 from the year ago period
Any recent changes to analyst estimates for PCG should also be noted by investors These recent revisions tend to reflect the evolving nature of short term business trends As such positive estimate revisions reflect analyst optimism about the company s business and profitability
Our research shows that these estimate changes are directly correlated with near term stock prices We developed the Zacks Rank to capitalize on this phenomenon Our system takes these estimate changes into account and delivers a clear actionable rating model
The Zacks Rank system ranges from 1 Strong Buy to 5 Strong Sell It has a remarkable outside audited track record of success with 1 stocks delivering an average annual return of 25 since 1988 Within the past 30 days our consensus EPS projection has moved 0 29 lower PCG is currently sporting a Zacks Rank of 3 Hold
Digging into valuation PCG currently has a Forward P E ratio of 3 27 Its industry sports an average Forward P E of 18 54 so we one might conclude that PCG is trading at a discount comparatively
It is also worth noting that PCG currently has a PEG ratio of 1 15 This metric is used similarly to the famous P E ratio but the PEG ratio also takes into account the stock s expected earnings growth rate PCG s industry had an average PEG ratio of 3 33 as of yesterday s close
The Utility Electric Power industry is part of the Utilities sector This group has a Zacks Industry Rank of 50 putting it in the top 20 of all 250 industries
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Be sure to follow all of these stock moving metrics and many more on Zacks com |
PCG | Why PG E PCG Could Beat Earnings Estimates Again | Have you been searching for a stock that might be well positioned to maintain its earnings beat streak in its upcoming report It is worth considering PG E PCG which belongs to the Zacks Utility Electric Power industry
When looking at the last two reports this utility holding company has recorded a strong streak of surpassing earnings estimates The company has topped estimates by 11 50 on average in the last two quarters
For the most recent quarter PG E was expected to post earnings of 1 12 per share but it reported 1 13 per share instead representing a surprise of 0 89 For the previous quarter the consensus estimate was 0 95 per share while it actually produced 1 16 per share a surprise of 22 11
Price and EPS Surprise
With this earnings history in mind recent estimates have been moving higher for PG E In fact the Zacks Earnings ESP Expected Surprise Prediction for the company is positive which is a great sign of an earnings beat especially when you combine this metric with its nice Zacks Rank
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank 3 Hold or better produce a positive surprise nearly 70 of the time In other words if you have 10 stocks with this combination the number of stocks that beat the consensus estimate could be as high as seven
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
PG E currently has an Earnings ESP of 1 61 which suggests that analysts have recently become bullish on the company s earnings prospects This positive Earnings ESP when combined with the stock s Zacks Rank 3 Hold indicates that another beat is possibly around the corner
Investors should note however that a negative Earnings ESP reading is not indicative of an earnings miss but a negative value does reduce the predictive power of this metric
Many companies end up beating the consensus EPS estimate but that may not be the sole basis for their stocks moving higher On the other hand some stocks may hold their ground even if they end up missing the consensus estimate
Because of this it s really important to check a company s Earnings ESP ahead of its quarterly release to increase the odds of success Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported |
PCG | PG E PCG Stock Sinks As Market Gains What You Should Know | PG E PCG closed at 15 23 in the latest trading session marking a 1 3 move from the prior day This change lagged the S P 500 s 0 3 gain on the day Meanwhile the Dow gained 0 46 and the Nasdaq a tech heavy index added 0 08
Heading into today shares of the utility holding company had gained 123 3 over the past month outpacing the Utilities sector s gain of 4 14 and the S P 500 s gain of 5 93 in that time
Investors will be hoping for strength from PCG as it approaches its next earnings release which is expected to be February 28 2019 The company is expected to report EPS of 0 62 down 1 59 from the prior year quarter Meanwhile our latest consensus estimate is calling for revenue of 4 29 billion up 4 51 from the prior year quarter
Any recent changes to analyst estimates for PCG should also be noted by investors These revisions typically reflect the latest short term business trends which can change frequently With this in mind we can consider positive estimate revisions a sign of optimism about the company s business outlook
Based on our research we believe these estimate revisions are directly related to near team stock moves We developed the Zacks Rank to capitalize on this phenomenon Our system takes these estimate changes into account and delivers a clear actionable rating model
Ranging from 1 Strong Buy to 5 Strong Sell the Zacks Rank system has a proven outside audited track record of outperformance with 1 stocks returning an average of 25 annually since 1988 Within the past 30 days our consensus EPS projection has moved 0 21 lower PCG is currently sporting a Zacks Rank of 4 Sell
In terms of valuation PCG is currently trading at a Forward P E ratio of 3 88 This represents a discount compared to its industry s average Forward P E of 18 54
It is also worth noting that PCG currently has a PEG ratio of 1 37 The PEG ratio is similar to the widely used P E ratio but this metric also takes the company s expected earnings growth rate into account PCG s industry had an average PEG ratio of 3 36 as of yesterday s close
The Utility Electric Power industry is part of the Utilities sector This industry currently has a Zacks Industry Rank of 84 which puts it in the top 33 of all 250 industries
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Be sure to follow all of these stock moving metrics and many more on Zacks com |
XOM | Exxon plans 65 capacity expansion at Beaumont plastics plant | Exxon Mobil XOM 0 7 says it plans to add a new production unit at its Beaumont Tex polyethylene plant that will increase capacity by 65 to 1 65M metric tons year to meet growing demand for high performance plastics XOM says the Beaumont project builds on supply advantages created by the expansion of its Mont Belvieu plastics plant in Texas where two similar polyethylene units are being added combined the new Beaumont uniti will increase XOM s U S polyethylene production by 40 or nearly 2M metric tons year XOM s previously announced investments at Beaumont include expansion of the refinery s crude refining capacity in 2015 and earlier this year construction of a new unit to increase domestic supply of ultra low sulfur gasoline and diesel |
XOM | Kashagan oil field produces 1 7M barrels in first full month of operation | Kazakhstan s Kashagan oil field produced 201K tons of oil or nearly 1 7M barrels in October its first full month of operation finally showing some results after multi year delays and 55B spent in development The October output figure is the equivalent of 52 6K bbl day while Kazakh officials have said that in order to reach commercial output the field needs to achieve stable production of at least 75K bbl day The consortium developing Kashagan consists of China National Petroleum NYSE PTR ExxonMobil NYSE XOM Eni NYSE E Royal Dutch Shell LON RDSa RDS A RDS B Total NYSE TOT Inpex and KazMunaiGas |
XOM | Bloomberg Exxon in talks with Chad over 74B fine in royalty dispute | ExxonMobil XOM 1 9 is negotiating with Chad s government about a 74B fine the company was told to pay last month by a court in the country because of a dispute over royalties Bloomberg reports The court which also ordered payment of 819M in overdue royalties imposed the fine in response to a complaint from Chad s finance ministry that an XOM led consortium had not met its tax obligations The government says the 74B penalty nearly 6x Chad s GDP is in line with the customs code of a regional organization of which Chad is a member |
XOM | Exxon in negotiations with Chad over record 74 billion fine Bloomberg | Reuters Exxon Mobil Corp N XOM is negotiating with Chad over a record 74 billion fine the U S oil company was told to pay by a court in the central African nation over unpaid royalties Bloomberg reported on Tuesday Exxon has appealed the Oct 5 court ruling but the appeals court hearing has been delayed because of the talks Bloomberg reported citing a lawyer for Exxon The court decision fined a consortium led by Exxon over 44 trillion CFA francs 73 44 billion nearly four times BP s Deepwater Horizon settlement and roughly seven times Chad s annual gross domestic product The consortium which includes Malaysian state oil firm Petronas and Chadian oil company SNT were found to owe the country nearly 484 billion CFA francs 808 million in royalties according to the court judgment It did not explain why the penalty amounted to more than 90 times that amount The unpaid royalties stem from a dispute over fees sources in the Chadian finance ministry have told Reuters The finance ministry they said is seeking a 2 percent royalty fee from the consortium a rate the defendants have said is higher than the agreed level
Exxon did not immediately respond to a request for comment while Petronas and SNT could not immediately be reached |
XOM | Dutch court gets 25 appeals against Groningen gas production cap | The top Netherlands administrative court says it has received 25 appeals against the government s decision to cap production at the Groningen gas field to 24B cm year from groups who sought a steeper reduction to prevent earthquakes which have damaged thousands of structures in the Dutch province The Groningen field at one time supplied 10 of the European Union s gas demand but the figure has been cut in half over two years after the Dutch Safety Board said citizens were not protected adequately from earthquakes triggered by gas exploitation Groningen is operated by a joint venture between Royal Dutch Shell LON RDSa RDS A RDS B and ExxonMobil NYSE XOM |
XOM | Iraq s oil contracts make joining OPEC output cut more painful | By Ahmad Ghaddar and Ahmed Rasheed LONDON BAGHDAD Reuters Iraq would have to compensate international oil companies for limits placed on their production according to industry sources and documents seen by Reuters further reducing the prospect it will join any OPEC deal to curb the group s output The compensation stipulated in contracts would compound the financial hit of losing much needed revenue from crude sales if the cash strapped country were to yield to OPEC entreaties to curtail national production OPEC member Iraq pays developers a fixed dollar denominated fee for every barrel of oil produced in the south of the country home to its biggest reserves under technical service contracts agreed between the international firms and the state owned South Oil Company SOC Immediately after an SOC notice of production curtailment the parties shall agree a mechanism to promptly fully compensate the contractor as soon as possible according to an excerpt of the contract the ministry signed with BP LON BP in 2009 for the company to develop the 20 billion barrel Rumaila field The compensation according to the excerpt seen by Reuters may include amongst other things a revised field production schedule or an extension to the term or payment of all or part lost income to contractor Britain s BP declined to comment The same clause also applies to other fields covered by the technical service contracts in the south including fields being developed by Anglo Dutch firm Shell LON RDSa U S major Exxon Mobil NYSE XOM and Italy s Eni according to industry sources A Shell spokeswoman said it did not comment on contracts Exxon declined to comment and Eni did not immediately reply to a request for comment A senior oil official with SOC told Reuters the country would not have to worry about curtailment clauses because it had no plans to limit production On the contrary we re encouraging the foreign companies to raise production as much as they can said the official who declined to be named as they are not authorized to speak publicly EVERY DOLLAR NEEDED The Organization of the Petroleum Exporting Countries agreed in Algiers in late September to limit its collective output to 32 5 33 million barrels per day bpd The group s production hit a record 33 64 million bpd in October Iraq has asked to be exempted from output curbs arguing it is still trying to regain market share lost when sanctions were imposed in the 1990s during the Saddam Hussein era and that it needs to keep up a costly battle against Islamic State OPEC must submit to the fact that Iraq must stay away from any possible output cut deal because the country is in the middle of a tough war and every single dollar is needed to keep it standing on its feet a senior government official close to Prime Minister Haider al Abadi told Reuters Iraq put its output at 4 77 million bpd in October and said it would not go back to below 4 7 million bpd Not for OPEC not for anybody else said Falah al Amri Iraq s OPEC governor and head of the country s state marketer SOMO There is however no certainty over how the discussions will play out at an OPEC meeting on Nov 30 As a consequence the Iraqi oil ministry and oil companies will not be able to finalize their 2017 spending plans until after the meeting to have enough clarity on what route Iraq will take on its near term production ambitions an industry source told Reuters Iraq has been making great efforts to ensure it pays its dues to oil firms promptly and oil minister Jabar Ali al Luaibi has made boosting production in the country a priority Iraq is one of the countries in the region that doesn t have large foreign reserves so will want to continue to maximize its revenue said Jessica Brewer Middle East upstream oil analyst at UK based consultancy Wood Mackenzie She added that while most Middle Eastern OPEC members had all or most of their production operated by national oil companies Iraq was one of the few that relied on international oil companies for the majority of its output |
CSCO | Ericsson s ERIC Q3 Earnings In The Red Shares Tumble | Telefonaktiebolaget LM Ericsson ST ERICAs publ NASDAQ ERIC more than delivered on its profit warning last week for its third quarter 2016 results as it reported its first loss in nearly four years Its diluted loss came in at SEK 7 1 penny in the quarter compared with earnings of SEK 94 in the prior year period
The Swedish wireless equipment maker had released ominous preliminary results last week indicating a huge decline in top line citing a steadily weakening mobile broadband business and overall adverse industry trends The news shocked investors and sent the stock plummeting 20
Ericsson reported non IFRS earnings per share excluding amortizations write downs of acquired intangible assets and restructuring charges of SEK 34 4 cents for the quarter missing the Zacks Consensus Estimate of 9 cents by a whopping 55 6 The bottom line fared even worse in year over year comparison having fallen a colossal 75 from the prior year tally of SEK 1 34
Investors were terribly disappointed with the top and bottom line miss Ericsson s shares were trending down significantly in pre market trading falling 4 3 at one point
This is the third consecutive earnings miss for the Swedish giant Ericsson missed earnings by nearly 29 in second quarter 2016
The decline in bottom line can be attributed to the consistent weak product demand which gave rise to weakness across the company s segments Also negative revaluation effects of currency hedge contracts and restructuring charges put further pressure on earnings
Inside the Headlines
Revenues continued their downward spiral and fell 14 year over year to SEK 51 1 billion 6 billion for the quarter lagging the Zacks Consensus Estimate of 6 5 billion
Sluggish growth in emerging markets like Brazil Russia and the Middle East completion of major projects in European markets and adverse currency translation hampered revenues Other broader negative trends from the first half of the year accelerated as well particularly impacting Networks segment
The decline in sales was all pervasive with all three operating segments of the company charting negative revenue growth
Segmental Performance
On a segmental basis Networks revenues were down 19 year over year to SEK 23 3 billion 2 7 billion Markets with a weak macro environment recorded softness in both mobile broadband coverage and capacity sales Delayed spectrum auction in India and lower 3G sales in China proved to be drag on sales in this segment
Also lack of revenues on account of completion of major European mobile broadband projects in 2015 compounded the segment s problems However rapid 4G deployment in China along with strong core networks sales compensated the decline to some extent
Global Services revenues fell 8 year over year to SEK 24 8 billion 2 9 billion Continued decline in Network Rollout sales and tepid professional services performance led to the unimpressive sales
Support Solutions revenues also went down 11 year over year to SEK 2 9 billion 340 million dragged primarily by lower software licensing sales in transformation projects
Ericsson s gross margin excluding restructuring charges in the quarter contracted 560 basis points year over year to 28 3 The company s efforts to curb costs failed to offset the diminishing sales and thus the company s margins contracted sharply A bigger share of lower margin business like services business along with lower sales in Networks and mobile broadband businesses contributed to the compressed margins
The decline in Ericsson s operating margin excluding restructuring charges was even more pronounced plummeting 790 basis points on a year over year basis to 0 7 The effect of lower gross margin trickled down to operating margins with higher R D expenses further contracting it
Three Pronged Growth Plan
Ericsson is presently following a three pronged strategy to drive growth The first strategic area is core business growth in which the company is focusing on deployment of 4G and promotion of 5G The company constantly seeks to seize business opportunities as operators shift toward 4G deployment and prepare grounds for the forthcoming 5G revolution
The second area of focus which is to improve profitability in the targeted growth areas is witnessing the company concentrate on software sales and recurring businesses to drive growth in its thriving Professional Services
The final growth area is cost and efficiency program that has been devised to generate higher cost savings In fact to adapt to and counteract the lower demand for mobile broadband investments Ericsson has mapped a set of significant actions to boost efficiency and cut costs further
The formerly announced cost and efficiency program through which Ericsson intends to unlock savings of SEK 9 billion in 2017 is moving ahead per the plan Ericsson further revealed plans to reduce cost of sales in order to adapt operations to weaker mobile broadband demand The company plans to reduce the annual run rate of operating expenses excluding restructuring charges to SEK 53 billion in the second half of 2017 through these initiatives This is comparable to SEK 63 billion in 2014 and equates to double the amount of savings in operating expenses that was previously targeted
Liquidity
During the quarter cash utilized in operating activities came to SEK 2 3 billion 270 million compared with cash generated from operating activities of SEK 1 6 billion at the end of third quarter 2015
Ericsson s cash and cash equivalents as on Sep 30 2016 totaled SEK 24 4 billion 2 9 billion compared with SEK 34 billion a year back
Changes in Company Structure
In first quarter 2016 Ericsson announced a set of structural changes to improve strategy execution and drive efficiency The company plans to design five business units and one dedicated customer group for Industry Society in line with its three pronged growth strategy With these changes Ericsson believes that it will be better equipped to cater to the needs of multiple customer segments and leverage on market opportunities to drive faster growth
To Conclude
Ericsson has been grappling with an industry wide slump in demand and fierce competition from China has further exacerbated this cyclical downturn Investors have steadily lost faith in this company which has tanked 49 over the past year
ERICSSON LM ADR Price and EPS Surprise
Ericsson is contending with stiff competition from Huawei Technologies Co and Nokia HE NOKIA Corp NYSE NOK Slumping demand in Russia and Brazil and accelerating negative industry trends have further compounded its problems Slowing pace of telecom industry upgrades to 4G standards and consequent lower spending from clients like Vodafone LON VOD and Verizon have battered Ericsson s prospects
To combat such critical industry concerns Ericsson recently struck a partnership with Cisco Systems Inc NASDAQ CSCO to boost its product lineup and sell more complete networks The company expects that the deal would generate 1 billion or more in annual sales for each company by 2018
The company is also taking internal steps to stabilize its operations somewhat It has plans to reduce its operating expenses by 10 billion kronor by 2017 compared with 2014 However the company has acknowledged that its savings plans and job reductions do not seem enough to weather the swiftly declining demand
Whether the growth and cost streamlining efforts of this Zacks Rank 4 Sell company will help it beat industry wide demand blues remains to be seen
InterDigital Inc NASDAQ IDCC develops and markets advanced digital wireless telecommunications systems using proprietary technologies for voice and data communications The Zacks Rank 1 Strong Buy company has an excellent earnings surprise history over the trailing four quarters beating estimates all through with a robust average positive surprise of 82 4 You can see
Note SEK 1 0 1172 Period average from Jul 1 2016 Sep 30 2016
SEK 1 0 1164 As on Sep 30 2016
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