Oil Pipelines

TransCanada Gets Nebraska Approval for Keystone XL on Alternative Route

12:57 PM, Nov 20, 2017 — TransCanada’s (TRP) Keystone XL pipeline received approval from regulators in Nebraska, but the okay was given to an alternate route rather than the course preferred by the Canadian energy company.

The Nebraska Public Service Commission said it approved the alternative mainline route, one of three paths proposed by TransCanada to take oil from Hardisty, Alberta to Steele City near the Nebraska-Kansas border. The mainline route follows along the existing Keystone pipeline for about 95 miles, the commission said in its decision on Monday.

“It is in the public interest for the pipelines to be in closer proximity to each other, so as to maximize monitoring resources and increase the efficiency of response times,” the PSC said. “This would also assist emergency responders and others that may be called upon to assist with any lssues that may arise with either pipeline.”

Keystone XL, which had been rejected by President Barack Obama in 2015 before being approved by his successor, Donald Trump, earlier this year, was the focus of protests amid concerns about the environmental impact of another pipeline.

“There’s no safe route for Keystone XL, and NRDC will continue fighting with every tool, in every venue and with every partner, to make sure it’s never built,” Anthony Swift, Canada project director at the Natural Resources Defense Council, was quoted on Twitter as saying.

Nebraska’s decision also comes after TransCanada’s existing Keystone pipeline was shut down because of a leak that spilled 210,000 gallons of oil in South Dakota last week. The company said on Sunday that 150 people are on site working to clean up the spill.

TransCanada “will conduct a careful review of the Public Service Commission’s ruling while assessing how the decision would impact the cost and schedule of the project,” Chief Executive Officer Russ Girling said in in a statement on Monday.

Companies: TransCanada Corporation
Price: 49.56 Price Change: +0.58 Percent Change: +1.19

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Tesla Motors Starts Mass Production of Battery Cells

Tesla’s Musk Launches New Semi With First Transport Company Orders Coming In

8:45 AM, Nov 17, 2017 — Tesla (TSLA) unveiled two versions of its electric semi transport truck late Thursday and by Friday morning, orders were coming in even with the slated start of production over a year away.

Tesla Chief Executive Officer Elon Musk drove a silver semi into the launch event in California, and touted the vehicle’s acceleration time, aerodynamics and 500-mile range at highway speeds.

“We attended the Tesla Semi event and net the Tesla Semi specs exceeded expectations,” said RBC Capital Markets analysts including Joseph Spak in a note on Friday. “Production (is) scheduled to start in 2019 and while Tesla has had challenges meeting deadlines, it does eventually get there.”

In the presentation, Musk said the Tesla Semi will have an operating cost of $1.26 per mile compared with a diesel truck’s cost of $1.51. Production will begin in 2019, he said.

On Friday, transport company J.B. Hunt (JBHT) said it was placing a reservation to buy “multiple” Tesla Semis that will be used in its intermodal and dedicated contract services on the west coast.

“Reserving Tesla trucks marks an important step in our efforts to implement industry-changing technology,” CEO John Roberts said in a statement. “We believe electric trucks will be most beneficial on local and dray routes, and we look forward to utilizing this new, sustainable technology.”

Musk also revealed on Thursday a new Roadster, with a top speed of 250 miles per hour. RBC said they believe the price tag will be $200,000.

Companies: Tesla, Inc.
Price: 322.66 Price Change: +10.16 Percent Change: +3.25

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Big Day at Dubai Airshow as Boeing Inks $27 Billion Deal, Airbus Signs MOU Worth $49.5 Billion

9:03 AM, Nov 15, 2017 — It’s been a big day for Boeing (BA) and Airbus, both of which announced large orders at the Dubai Airshow on Wednesday.

Boeing said it sold 225 of its 737 MAX airplanes with a list value of $27 billion to Flydubai, the largest single-aisle jet order by number and value from a Middle East carrier. The transaction surpasses the airline’s prior record order of 75 MAXs and 11 next-generation 737-800s signed at the 2013 Dubai Airshow.

The deal is for 175 MAX aircraft and purchase rights for an additional 50, Boeing said in a statement on Wednesday. More than 50 of the initial order will be 737 MAX 10s, the newest and largest member of the 737 MAX family, Boeing said.

Airbus, meanwhile, was doing some wheeling and dealing of its own at the airshow, securing a memorandum of understanding with Indigo Partners’ four airlines for the purchase of 430 additional A320neo family aircraft valued at just shy of $50 billion.

The aircraft will be allocated among Frontier Airlines in the US, JetSMART in Chile, Volaris in Mexico and Wizz Air in Hungary upon completion of final purchase agreements, Airbus said.

The commitment is comprised of 273 A320neos and 157 A321neos, and was also announced at the Dubai Airshow. With the purchase, Indigo Partners and its airlines will become one of the biggest customers for Airbus’ single-aisle aircraft family as it’s purchased in the past 427 A320 family of aircraft.

Companies: Boeing Company (The)
Price: 261.76 Price Change: Percent Change: +0.00

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General Electric

General Electric Slashes Dividend and Shrinks Board Amid Overhaul Plans

12:10 PM, Nov 13, 2017 — General Electric (GE) slashed its dividend by half and plans to cut the size of its board of directors as it set earnings expectations for 2018 below analysts’ expectations and said the year will be a “reset and stabilize” period.

The Boston-based industrial giant said it was cutting its quarterly dividend to a payout of $0.12 from $0.24 previously, effective likely next month.

“We understand the importance of this decision to our shareowners and we have not made it lightly,” John Flannery, who was named chief executive of the firm in June, said in a statement Monday. “We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation.”

In a presentation released to accompany an investor update that took place later in the morning, GE said it was cutting the size of its board from 18 to 12 directors who will be nominated at the general meeting in April next year. They will have a 15-year term limit, the company said.

GE also said it’s exiting $20 billion in assets and plans to reduce volatility and commodity exposure by looking at “optionality” for its oil services unit Baker Hughes (BHGE) to make a “simpler, more focused” GE company.

GE sees 2017 adjusted earnings per share in a range of $1.04 to $1.12, compared with the Street’s view for $1.07, and its outlook for 2018 is in a range between $1 and $1.07 a share, which is beneath analysts’ expectations, for $1.14 a share.

In 2019, GE is looking for continued growth in healthcare, the start of a rebound in transportation, stabilization in power and continued trends in aviation. GE will take a “highly disciplined” approach to mergers and acquisitions and make improving free cash flow across all businesses a priority.

Companies: General Electric Company
Price: 19.49 Price Change: -1.00 Percent Change: -4.87

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Stocks in Retreat as US Tax Reform Bill, Tech Sector Slide Weighs

12:26 PM, Nov 9, 2017 — Markets in the US were weaker on Thursday, as declines in information technology pushed the Nasdaq Composite to its lowest intraday level in almost as week and nearly all of the sectors on the Standard & Poor’s 500 were in the red.

Stocks added to losses amid early afternoon reports that the Senate’s tax reform bill would push a cut in corporate taxes out to 2019, according to CNBC, contrasting the policy currently being considered by the House. Financials steepened their declines, with the group down about 1% on the S&P 500.

The tech sector lost 1.1% with semiconductor stocks losing ground. Advanced Micro Devices (AMD) shed 3.8% after Intel (INTC) said it had hired Raja Koduri as chief architect and senior vice president of its new core and visual computing group. Koduri was previously at AMD and has also worked at Apple (AAPL).

Intel slipped 1.4% on the sector’s weakness, while NVIDIA (NVDA) lost 2.9% and Micron Technologies (MU) was down 2.3%.

A sharp drop in building products firms sent the industrials sector down 1.3% while energy weakened even amid higher prices for crude futures.

In company news, Roku (ROKU) surged 43% after third quarter sales beat estimates and the pro-forma loss per share narrowed from a year ago. NetApp (NTAP) gained 3.3% after Barclays raised its rating on the stock to overweight from equal weight.

Alliqua BioMedical (ALQA) plunged 24% after the company said it hired Cowen to assist in a review of potential strategic alternatives. Snap (SNAP) dropped 4% after Morgan Stanley lowered its shares to underweight from equal weight.

In economic news, initial jobless claims bounced by 10,000 to 239,000 in the week of Nov. 4 after falling 5,000 to 229,000 in the prior week. Wholesale trade inventories were up 0.3%, matching the consensus on Econoday although slower than the prior month’s revised 0.8% increase.

In early afternoon trading, the Nasdaq dropped 1.2% while the Dow and the S&P 500 lost 0.9%.

Globally, the Nikkei 225 fell 0.2%, the Shanghai Composite rose 0.4%, the Hang Seng climbed 0.8% and the FTSE 100 lost 0.6%.

 

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European Stocks Slightly Higher Amid Spate of Earnings, Oil Prices Retreat From Two-Year High

6:20 AM, Nov 7, 2017 — European equity benchmarks were marginally higher on Tuesday morning as the earnings season continued, while the gains were muted after oil prices retreated from a two-year high reached during the previous session.

The gains “stem from another positive close on Wall St, with more record highs to boot, and gains across the board for major Asian bourses overnight,” Michael van Dulken, head of research at Accedo Markets in London, said by e-mail.

Brent, the international oil benchmark, fell 0.5% on Monday morning, to $63.93 per barrel and West Texas Intermediate, the US crude benchmark, dropped 0.2% to $57.23 per barrel. On Monday, both benchmarks surged, hitting their highest since mid-2015 after Saudi Arabia’s crown prince’s move to crack down on corruption.

In economic news, euro region retail sales rose 0.7% in September from August, when it posted a 0.1% monthly drop, Eurostat, the European Union’s statistics office said on Tuesday. Economists had expected a 0.6% gain for September, according to a poll provided by investing.com.

The Europe-wide STOXX 600 index was 0.1% higher with most sectors trading in a positive territory.

In equities, oil stocks held onto gains coming from Monday’s spike in crude prices with BP gaining 1.3% in London and Total rising 1% in Paris. Shares in basic resources stocks also remained higher, with Rio Tinto up by 0.7% and Antofagasta gaining 0.6%.

Tobacco company Imperial Brands jumped 2.6% in London after reporting a 7% increase in adjusted earnings per share to 267 pence in the year ended Sept. 30. Associated British Foods fell 3.3% even after saying group revenue in the year through Sept. 16 rose 6% when adjusted for currency swings.

French lender Credit Agricole rose 1.2% after saying its Indosuez Wealth Management unit agreed to buy a majority stake in Italy’s Banca Leonardo. Luxury goods company LVMH dropped 0.8% in Paris.

Reinsurer Munchener Re rose 0.8% and Deutsche Bank gained 0.7% in Frankfurt. Dialog Semiconductor fell 8% even after strong third-quarter earnings as it gave a cautious outlook for the fourth quarter.

The euro-region blue-chip STOXX 50 index was 0.1% lower, Frankfurt’s DAX gained 0.2%, London’s FTSE 100 and Paris’ CAC 40 in Paris were both flat at the time of writing.

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Broadcom Makes $103 Billion Bid for Qualcomm In Potential Chipmaker Takeover

12:02 PM, Nov 6, 2017 — Broadcom (AVGO) confirmed on Monday that it has made a $70-a-share offer for semiconductor maker Qualcomm (QCOM), touting the proposal as a way to bring more of the chips that are used in electronic devices to more customers around the world.

The offer price is a 28% premium over Qualcomm’s closing level last Thursday, which was the last day before speculation about the bid began circulating, Broadcom said. It comprises $60 a share in cash and $10 in Broadcom stock. Based on Qualcomm’s outstanding shares, the offer is worth $103 billion.

The bid is on the table whether Qualcomm’s proposed $110-a-share takeover of NXP Semiconductors (NXPI) goes through or is cancelled.

“We would not make this offer if we were not confident that our common global customers would embrace the proposed combination,” Broadcom’s chief executive officer, Hock Tan, said in a statement. “With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value.”

In a statement, Qualcomm said it “will assess the proposal in order to pursue the course of action that is in the best interests” of shareholders.

Broadcom management’s comments about global customs embracing the deal “could mean that the company has had discussions with large OEMs like Apple and Samsung,” said Tim Long, an analyst with BMO Capital Markets, in a note.

Apple and Qualcomm have engaged in a series of legal battles and last week, Bloomberg reported that Apple is said to be developing versions of its iPad and iPhone that don’t use Qualcomm components.

“We think this deal fits AVGO’s strategy and could be a material catalyst to enable sustained” upside to earnings per share and free cash flow, said RBC Capital Markets analyst Amit Daryanani in a note Friday. Broadcom said the deal is expected to be accretive to non-GAAP earnings in the first full year after it closes.

Companies: Qualcomm Incorporated
Price: 63.08 Price Change: +1.27 Percent Change: +2.05

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Equities Strengthen in US as Apple’s Earnings Sends Stock to Record

12:39 PM, Nov 3, 2017 — The main US markets were higher on Friday, heading for records on a closing basis as Apple’s (AAPL) earnings beat propelled the company to a market value of almost $900 billion and key jobs data showed a slight decline in the unemployment rate.

The world’s biggest economy added 261,000 nonfarm payrolls last month, missing the consensus on Econoday for 325,000 but higher than September’s growth of 18,000, which was revised from an earlier contraction of 33,000. The jobless rate was 4.1%, down slightly from 4.2% in the prior month.

Stocks were firmer after the report, although the Standard & Poor’s 500 and the Dow Jones Industrial Average dipped into the red before recovering and joining the Nasdaq Composite in a move higher.

Apple jumped 3% to an intraday record, leading gains on the Dow and sending the S&P’s information technology sector up 0.5%. The tech giant after the bell on Thursday guided for upbeat revenue in the current quarter while reporting higher-than-expected profit and revenue for the most recent quarter.

Also in earnings, American Axle & Manufacturing (AXL) gained 6.2% after the maker of chassis modules for light trucks boosted its full-year sales outlook while reporting higher-than-expected results for the most recent quarter. Activision Blizzard (ATVI) slid 4.2% after third quarter results missed expectations and guidance was set below analysts’ views.

In other company news, Aquatia (AQ) jumped 13% above its initial public offering price in its trading debut. Rent-A-Center (RCII) gained 11% after saying it will review a $13-per-share takeover offer from Vintage Capital Management.

In afternoon trading, the Nasdaq rose 0.4%, the S&P 500 gained 0.2% and the Dow added 0.1%.

Globally, the Hang Seng rose 0.3%, the Shanghai Composite fell 0.3%, the FTSE 100 rose 0.1% and the Nikkei 225 was closed for a holiday.

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DowDuPont’s Debut Results Tops Analysts’ Expectations as $3 Billion Savings Plan Outlined

12:19 PM, Nov 2, 2017 — DowDuPont, (DWDP) the company formed in August after the merger of Dow Chemical and DuPont, reported higher-than-expected earnings in its debt quarterly release on Thursday, as the firm outlined plans for job cuts and other actions in a $3 billion cost savings push.

Pro forma adjusted earnings rose to $0.55 a share from $0.50 a year earlier. The consensus on Capital IQ was for $0.45. Net sales climbed 8% to $18.3 billion on a pro forma basis, and were up 23% to $15.4 billion on a GAAP basis. The Street was expecting $18.2 billion.

“The company had to contend with a mega-merger, numerous natural disasters, several large-scale productivity initiatives, establishing architecture for three new companies and executing substantial portfolio actions,” said Kevin McCarthy, chemicals analyst at Vertical Research Partners. “Notwithstanding these challenges, DowDuPont managed to deliver encouraging results in the company’s first quarter out of the gate.”

When DowDuPont completed the merger, it split the company into three businesses comprising agriculture, materials sciences and specialty products. On Thursday DowDuPont said it’s taking actions to generate $3 billion in cost savings to “integrate the organization post-merger and create strong foundations for the three intended companies.”

The savings will come from global job cuts, procurement synergies, consolidation of buildings and facilities and select asset shutdowns, the company said. DowDuPont said it expects to recognize total pre-tax charges of about $2 billion, with $1 billion in the fourth quarter. The program is seen achieving a 70% run rate at the end of 12 months and 100% within 24 months.

“You should expect us to remain focused on executing on our $3 billion cost synergy commitment and advancing preparations to create three focused growth companies in agriculture, materials science, and specialty products,” said Chief Executive Ed Breen.

Companies: DowDuPont Inc.
Price: 71.74 Price Change: -1.58 Percent Change: -2.15

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Oil Drilling

BP Underlying Profit Doubles in Third Quarter on Rising Production, Fuel Sales

6:24 AM, Oct 31, 2017 — UK oil major BP (BP, BP.L) said that its underlying replacement cost profit, its preferred profit measure, for the third quarter, doubled from a year earlier on rising oil production and double-digit earnings growth from fuels sales.

Underlying replacement cost profit, an adjusted measure which excludes a net charge for non-operating items of $274 million and net adverse fair value accounting effects of $212 million, totaled $1.87 billion, compared with $933 million a year earlier, the company said in a statement on Tuesday. Revenue climbed to $60.81 billion from $48.04 billion in the same period last year, the company said.

“We are steadily building a track record of delivering on our plans and growing across our businesses,” Bob, Dudley chief executive at BP, said. “This quarter, three new Upstream projects and the highest Downstream earnings in five years, underpinned by reliable operations and disciplined spending, have generated healthy earnings and cash flow.”

BP also said it’s restarting a share buyback program in the fourth quarter to offset the dilutive effect of its scrip dividends over time.

Three major projects, the Persephone project in Australia, the Juniper project in Trinidad, and the first phase of the Khazzan tight gas development in Oman, began production in the third quarter. The company said it expects the seventh, and last of the production projects planned for 2017, Zohr in Egypt, to start up before the end of the year.

Reported group oil and gas production in the third quarter averaged 3.6 million barrels of oil equivalent a day, 14% higher than a year earlier.

The company said that in the fourth quarter it expects a normal seasonal decline compared with the third quarter in the “robust” industry refining margins.

Price: 39.72 Price Change: +0.10 Percent Change: +0.25

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