Tuesday, July 30, 2013

BP turned the tides now back into net profit in second quarter

BP energy

BP bounces back to net profit in the second quarter, lifted by the absence of major writedowns, the British energy giant announced Tuesday.

Earnings after taxation is at $2.042 billion (1.541 billion euros) in the three months to the end of June, BP revealed in a results statement.

That compared with a loss of $1.519 billion in the same part of last year, when it was hit by lower oil prices and vast writedowns on the value of assets.

The company also raised the total amount of money it has set aside to pay costs related to the devastating 2010 Gulf of Mexico oil spill disaster to $42.4 billion, from $42.2 billion previously.

BP added that its so-called replacement cost profit -- which excludes gains or losses in the value of inventories -- jumped to $2.4 billion in the quarter, compared with $104 million last time around.

However, stripping out writedowns on the value of oil fields and refineries in the United States last year, underlying replacement cost profit sank 24 percent to $2.71 billion.

That dashed market expectations of $3.40 billion, according to analysts polled by Dow Jones Newswires, and sent BP's share price falling in morning deals.

BP said it faced a higher tax rate, lower oil prices, higher costs and lower post-tax income from Russia due to currency effects.

In addition, total oil and gas production fell 1.5 percent to 2.241 million barrels of oil equivalent per day in the reporting period, mostly because of asset sales.

"The results show strong underlying pre-tax performance from BP's businesses," said Chief Executive Bob Dudley in the earnings release.

"We are seeing growth in production from new high-margin projects and are making good progress in exploration and project delivery.

"Completion of our operational milestones confirms our confidence in delivering our commitment to materially increase operating cash flow in 2014."

In morning deals, however, BP's share price slid 2.08 percent to 457.7 pence on London's FTSE 100 index of leading companies, which was 0.30 percent higher at 6,580.03 points.

"The oil giant has unfortunately missed analyst estimates, with increased government taxes, currency movements and a lower oil price all contributing," said equity analyst Keith Bowman at Hargreaves Lansdown Stockbrokers.

"Actual production has again fallen, impacted by ongoing business sales, whilst legal settlements in relation to the Gulf Of Mexico accident continue to cast a long shadow."

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Thursday, July 25, 2013

Facebook’s Mobile-Ad Sales Soar

Facebook Inc. (FB) Chief Executive Officer Mark Zuckerberg’s decision last year to bet big on mobile software is paying off, with sales of ads on wireless devices now on track to surpass revenue from desktop computers.

Surging demand for mobile advertising helped profit and revenue top analysts’ estimates in the second quarter. The results sent shares of the world’s most popular social-networking service up 21 percent in extended trading yesterday, leaving them poised for a record one-day gain today.

The results may finally quiet concerns, voiced by analysts and investors since Facebook’s May 2012 initial public offering, that the rising popularity of smartphones and tablets is outpacing its ability to make money selling promotions to mobile users. By letting marketers show messages in the news feed on such devices, and shifting development efforts toward applications, Zuckerberg is delivering on his promise of making Facebook a “mobile-first” company, according to Jordan Rohan, an analyst at Stifel Nicolaus & Co. in New York.

“There’s latent demand for marketers to spend money on Facebook,” Rohan, who rates the shares a buy, said in an interview. “The company finally introduced the right set of ad products to facilitate that.”
Revenue rose 53 percent to $1.81 billion in the latest quarter, the company said in a statement yesterday. Profit excluding certain items was 19 cents a share. Analysts had projected profit of 14 cents on sales of $1.62 billion on average, according to data compiled by Bloomberg.

Blowout Quarter

Facebook added 17 percent to the equivalent of $30.94 in German trading at 10:30 a.m. Frankfurt time. They rose as much as 21 percent to $31.98 in extended trading yesterday, signaling the $64 billion company may exceed its record one-day gain of 19 percent in October, according to data compiled by Bloomberg.

“Finally, the blowout quarter that Facebook bulls have been waiting for,” said Paul Sweeney, an analyst at Bloomberg Industries. “Among many impressive data points, I think investors will focus on the percentage of revenue from mobile of 41 percent, which was well above consensus.”

Facebook, which had priced its IPO at $38 a share, saw its stock slump as low as $17.55 in September and was trading 30 percent below its initial offering price before yesterday’s results. Concern about Facebook’s ability to shift to mobile has weighed on the company’s shares since its $16 billion IPO, the largest technology offering on record.

Even with the decline, the Menlo Park, California-based company traded at 115 times earnings as of yesterday’s close, more expensive than 98 percent of the companies in the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

Mobile Push

Mobile ads, which made up 30 percent of revenue in the first quarter, will soon account for more than half of advertising dollars, Zuckerberg said on a conference call. The number of mobile users expanded 51 percent to 819 million during the quarter. The total number of Facebook members was 1.15 billion, compared with 1.11 billion in the earlier period.

“This quarter represents a strong validation that we’re effectively navigating the shift to mobile,” David Ebersman, Facebook’s chief financial officer, said in an interview. “All the investments we’ve been making in the business have been paying off.”

Facebook is projected to take 13 percent of the global mobile-advertising market this year, up from 5.4 percent last year, according to EMarketer Inc. Even so, the company remains a distant No. 2 to Google Inc. (GOOG), which is expected to grab 56 percent of the market in 2013.

Facebook has stepped up efforts with its mobile services, including updates to its smartphone applications and a new video feature for photo-sharing service Instagram.

Daily Users

Net income attributable to shareholders was $333 million, or 13 cents a share, compared with a loss of $157 million, or 8 cents, a year earlier.

More than half, or 61 percent, of Facebook members use the site daily, a number that has risen even as management projected it would decline, Zuckerberg said on the call.
“As we’ve grown, I always expected our ratio of daily actives to monthly actives would decrease as later technology adopters joined our service,” Zuckerberg said. “The opposite has actually been true.”

Revenue from payments, which includes virtual goods sold in games such as “FarmVille 2” and “Candy Crush Saga,” grew to $214 million in the second quarter, a gain of 11 percent from a year earlier.

The company lowered its estimate on capital expenditures this year to $1.6 billion, down from its earlier forecast of $1.88 billion, due to efficiency gains and the timing of planned purchases, Ebersman said on the call.

Marketing Tools

Facebook is also making improvements to its advertising tools for marketers. The company said last month it intends to cut its 27 ad units by more than half, making the promotion-buying process more simple and efficient.

The social-networking provider has been wooing more large advertisers. In April, Facebook won back General Motors Co. as a customer almost a year after the automaker said it was pulling ads off the service.

“It’s been pretty clear for a long time that Facebook could monetize its 1.1 billion users a lot better,”

Michael Pachter, an analyst at Wedbush Securities Inc. in Los Angeles, said in an interview. “It may sound simple, but we always knew that if they would just try harder, they could deliver.”

Tuesday, July 16, 2013

European markets Trading Floor update

European markets were trading cautiously this morning. The FTSE and DAX opened up 0.2% while the CAC and Euro Stoxx were up by 0.1%.

The FTSE was topped by Kingfisher and Randgold Resources, while Burberry and Vedanta Resources recorded losses. Citigroup reported positive net income figures for the three months to the end of June.

Looking at the foreign exchange market, the euro and Australian dollar appreciated against the US dollar ahead of Bernanke's Testimony taking place on Wednesday. The rates were 0.9177 for AUD/USD and 1.3069 for EUR/USD. GBP/USD, on the other hand, was trading slightly lower at 1.5090 this morning.

Thursday, July 11, 2013

Hedge fund are now allowed to advertise publicly

The Securities and Exchange Commission lifts ban on public advertisements of Hedge funds and other firms that seek private investments

Through a 4-1 vote, the rule eliminates an 80-year regime of advertising restrictions intended to safeguard small investors from taking on potentially dangerous risk. The rule covers the way issuers raise funds through private offerings, a process that is exempt from requirements to report public financial statements.

While the rule would authorize firms to raise unlimited amounts via mass advertising of private offerings, it would require reasonable steps to ensure that buyers are so-called accredited investors — who are wealthier and deemed better able to gauge investment risks.

The rule would also make it easier for start-up businesses to raise funding without immediately requiring compliance with SEC disclosure rules. The measure is the first adopted by the SEC under a mandate in the 2012 Jumpstart Our Business Startups Act approved by Congress and signed by President Obama.

The SEC adopted the rule while unanimously approving a separate rule to ban most felons and other "bad actors" from involvement in private offerings.

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Wednesday, July 3, 2013

U.S. Stock Futures Decline as Oil Surges on Egypt Unrest

U.S. stock-index futures fell, tracking global equities lower, as crude oil rose above $100 a barrel for the first time since September amid political turmoil in Egypt, and as investors awaited a private report on jobs.

Bank of America Corp. lost 0.8 percent in pre-market trading and Citigroup Inc. declined 1.5 percent in Germany. BlackBerry slid 2.6 percent in early New York trading, indicating the smartphone maker may drop for a fifth day. Sprint Nextel Corp. may move after people familiar with the matter said Softbank Corp.’s bid for the carrier won support from the last U.S. regulatory body reviewing the transaction.

Futures on the Standard & Poor’s 500 Index (SPX) expiring in September slid 0.6 percent to 1,598.4 at 10:58 a.m. in London. Contracts on the Dow Jones Industrial Average lost 76 points, or 0.5 percent, to 14,785 today.

The S&P 500 yesterday fell less than 0.1 percent to 1,614.08. The gauge has slipped 3.3 percent since May 21, the day before Federal Reserve Chairman Ben S. Bernanke said the central bank may taper bond purchases if the U.S. economy improves in line with its forecasts.

The West Texas Intermediate for August delivery surged to as high as $102.18 a barrel, its highest price since May 2012, as political unrest in Egypt sparked concern of Middle East supply disruptions and as a report showed U.S. stockpiles shrank in the week ended June 28.