Crude Oil Futures Drop as Demand-Led Rally Takes a Breather
SECTOR COMMENTARY:
Stocks are retreating this morning after a deluge of earnings although many companies reported earnings that outpaced expectations. Traders are taking profits on the final day of the month following record closing level in the S&P 500 yesterday.
Exxon Mobil continued the theme of higher than expected profits among oil majors. The company’s results were boosted by the exploration and drilling division as well as from higher chemicals prices that helped offset losses incurred during the February storm in Texas. Chevron Corp. matched forecasts but disappointed some investors by holding off on reinstating share buybacks. Several E&Ps also reported today.
Crude oil futures dropped 1.1% as raw materials cooled from a scorching rally, while the dollar climbed making commodities priced in the currency less attractive. Prices remain on track for a weekly gain after topping $65 a barrel on Thursday for the first time since mid-March. “The near-term outlook is still bullish for oil,” said Stephen Brennock, an analyst at PVM Oil Associates. “India’s Covid woes are the exception rather than the rule.”
Natural gas futures are higher, reversing yesterday’s losses as the injection builds forecasted for next week suggest a moderation in supplies.
Chevron reported earnings of $1.4 billion ($0.72 per share - diluted) for first quarter 2021, compared with $3.6 billion ($1.93 per share - diluted) in first quarter 2020. Included in the current quarter were pension settlement costs and legal reserves totaling $351 million. Foreign currency effects decreased earnings by $2 million. Adjusted earnings of $1.7 billion ($0.90 per share - diluted) in first quarter 2021 compares to adjusted earnings of $2.5 billion ($1.31 per share - diluted) in first quarter 2020.
Exxon Mobil announced estimated first quarter 2021 earnings of $2.7 billion, or $0.64 per share assuming dilution, compared with a loss of $610 million in the first quarter of 2020. Results included unfavorable identified items of $31 million, or $0.01 per share assuming dilution. First quarter capital and exploration expenditures were $3.1 billion, $4 billion lower than the first quarter of 2020.
According to Reuters, Eni said its net profit in the first quarter jumped almost five times as firmer oil prices offset lower production. Adjusted net profits in the period came in at 0.27 billion euros ($327 million), below an analyst consensus provided by the company of 0.44 billion euros. In the fourth quarter they were 0.5 billion euros.
According to Reuters, Eni said it had approved the launch of a strategic project to list or sell a minority stake in a new retail and renewable energy business as part of the company's energy transition. The various options under consideration, including a stock exchange listing through an initial public offering or the sale or exchange of a minority stake in the new entity, will be evaluated in the course of 2022, it added.
Imperial Oil Limited reported estimated net income of $392 million for the first quarter of 2021, driven by improved crude prices, strong operating performance and continued cost discipline across all business segments, and bolstered by improved product and chemical margins compared to the fourth quarter. In addition, quarterly dividend was raised by almost 23% from 22 cents to 27 cents per share.
Imperial Oil Limited announced that it has received final acceptance from the Toronto Stock Exchange to amend its normal course issuer bid to increase the number of common shares that it may repurchase. Under the amendment, the number of common shares that may be repurchased will increase from 50,000 common shares to up to four percent of its 734,076,755 outstanding common shares as of June 15, 2020, or a maximum of 29,363,070 shares during the 12-month period from June 29, 2020 to June 28, 2021.
Cabot Oil & Gas reported financial and operating results for the first quarter of 2021.First quarter 2021 net income was $126.4 million, or $0.32 per share, compared to $53.9 million, or $0.14 per share, in the prior-year period. First quarter 2021 adjusted net income (non-GAAP) was $150.0 million, or $0.38 per share, compared to $54.0 million, or $0.14 per share, in the prior-year period. First quarter 2021 EBITDAX (non-GAAP) was $300.4 million, compared to $189.0 million in the prior-year period. In addition, Cabot's Board of Directors has approved a 10 percent increase in the quarterly base dividend to $0.11 per share on the Company's common stock, resulting in the sixth dividend increase since May 2017.
Marathon Oil announced that the Company fully redeemed its $500 million aggregate principal amount of 2.8% Senior Notes Due 2022. This transaction will reduce annual cash interest expense by $14 million. Marathon Oil also announced today that the Company's board of directors has declared a dividend of 4 cents per share on Marathon Oil Corporation common stock. The dividend is payable on June 10, 2021, to stockholders of record on May 19, 2021.
Rogers Corporation announced financial results for the first quarter of 2021. Net sales of $229.3 million increased 8.8% versus the prior quarter from higher sales in both the AES and EMS business units. GAAP earnings per diluted share were $1.66, compared to earnings per diluted share of $0.81 in the previous quarter. n an adjusted basis, earnings were $1.92 per diluted share compared to adjusted earnings of $1.58 per diluted share in the prior quarter.
Rogers Corporation announced that Ram Mayampurath has been appointed to serve as the Company’s new Senior Vice President, Chief Financial Officer and Treasurer effective May 1, 2021. Mr. Mayampurath is replacing Michael Ludwig as CFO, whose retirement was previously announced. Mr. Ludwig will remain with the Company for a transition period prior to his retirement.
SM Energy announced operating and financial results for the first quarter 2021. First quarter 2021 net loss was $251.3 million, or $2.19 per diluted common share, which compared with a net loss of $411.9 million, or $3.64 per diluted common share, in the same period in 2020. The current period included a $344.7 million net derivative loss, while the prior year period included a $989.8 million impairment, partially offset by a $545.3 million net derivative gain. First quarter 2021 adjusted net loss was $5.7 million, or $0.05 per diluted common share, which compares with adjusted net loss of $5.6 million, or $0.05 per diluted common share, for the same period in 2020.
Southwestern Energy announced financial and operating results for the first quarter ended March 31, 2021. For the quarter ended March 31, 2021, Southwestern Energy recorded net income of $80 million, or $0.12 per diluted share, compared to a net loss in 2020 of $1.5 billion, or ($2.86) per diluted share, attributable to a $1.48 billion non-cash full cost ceiling test impairment and $408 million tax valuation allowance included in 2020 results. Adjusted net income was $196 million, or $0.29 per diluted share, in the first quarter of 2021, compared to $56 million, or $0.10 per diluted share, for the prior year period.
Advantage Oil & Gas reported first quarter 2021 results. Adjusted funds flow was $54.0 million ($0.29 per share), exceeding capital by 45%. Net debt was reduced to $214.5 million, a reduction of $150.4 million from the first quarter of 2020 and $36.9 million from the fourth quarter of 2020.
Enerplus Corporation announced that it has increased and extended its senior, unsecured bank credit facility to US$900 million with a maturity date of October 31, 2025; incorporating sustainability-linked performance targets to establish a Sustainability-Linked Credit Facility with no changes to its existing pricing grid or covenant package.
Pason Systems announced its 2021 first quarter results. Pason generated $42.6 million in revenue in Q1 2021, a 42% reduction from $74.0 million generated in the three months ended March 31, 2020. The Company recorded net income attributable to Pason of $4.3 million ($0.05 per share) in the first quarter of 2021 compared to net income attributable to Pason of $16.9 million ($0.20 per share) recorded in the corresponding period in 2020.
Pason Systems announced that the Board of Directors declared a quarterly dividend of five cents(C$0.05) per share on the company's common shares. The dividend will be paid on June 29, 2021, to shareholders of record at the close of business on June 15, 2021.
U.S. Silica Holdings announced a net loss of $20.8 million, or $(0.28) per basic and diluted share, for the first quarter ended March 31, 2021, compared with net income of $4.6 million, or $0.06 per basic and diluted share, for the fourth quarter of 2020.
Helmerich & Payne reported a net loss of $121 million, or $(1.13) per diluted share, from operating revenues of $296 million for the quarter ended March 31, 2021, compared to a net loss of $70 million, or $(0.66) per diluted share, on revenues of $246 million for the quarter ended December 31, 2020. The net losses per diluted share for the second and first quarters of fiscal year 2021 include $(0.53) and $0.16, respectively, of after-tax gains and losses comprised of select items.
Reuters - Phillips 66 a diversified energy manufacturing and logistics company, announces a first-quarter 2021 loss of $654 million, compared with a loss of $539 million in the fourth quarter of 2020. Excluding special items of $145 million, the company had an adjusted loss of $509 million in the first quarter, compared with a fourth-quarter adjusted loss of $507 million.
Phillips 66 Partners LP announced a first-quarter 2021 loss of $18 million, or $0.13 per diluted common unit. Cash from operations was $227 million, and distributable cash flow was $233 million. Adjusted EBITDA was $289 million in the first quarter, compared with $318 million in the prior quarter.
Shell Midstream Partners reported net income attributable to the Partnership of $163 million for the first quarter of 2021, which equated to $0.37 per diluted common limited partner unit. Shell Midstream Partners also generated adjusted earnings before interest, income taxes, depreciation and amortization attributable to the Partnership of $201 million.
U.S. stock index futures were down as investors awaited the consumer spending data, after the S&P 500 closed at a record high in the previous session following upbeat quarterly results from top companies. European shares were mostly lower, giving up earlier gains. Asian equities ended in the red, with Japan’s Nikkei weighed down by disappointing outlook from technology companies. The dollar index was up, while spot gold fell. Palladium rose above $3,000 for the first time as the market worried about a shortage. Oil prices slipped on concerns of wider lockdowns in India and Brazil to curb the COVID-19 pandemic.
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Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services – the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner.
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