Energy stocks edged mostly lower Tuesday, pressured by a pullback in crude-oil prices, a mixed bag of first-quarter earnings, and analyst notes cautioning that the sector is looking fully valued.
The Amex Oil Index ($XOI : 1,264.24, -8.26, -0.6% ) fell 0.7% to 1,264 points and the Amex Natural Gas Index ($XNG 493.61, -1.57, -0.3% ) eased 0.3% to 493.6 points.
Moving against the grain, the Philadelphia Oil Service Index ($OSX : 225.60, +0.29, +0.1% ) managed a late comeback to post a 0.1% gain at 225.6 points, though never straying far from the previous session's close. Crude-oil for June delivery dropped $1.31 a barrel to $64.58 on the New York Mercantile Exchange as traders locked in gains, ending a two-day rally that had pushed prices as much as 4% higher. See Futures Movers.
Exxon Mobil Corp. (XOM :78.60, -0.60, -0.8% ) was hit with another downgrade Tuesday, this time from A.G. Edwards. The broker dropped its recommendation on the world's biggest publicly-traded oil company to hold from buy, citing the current high value of the stock.
"Although production growth has materialized as expected, we believe this along with Exxon's industry-leading returns are largely priced into the shares," A.G. Edwards said in a research note. Deutsche Bank downgraded Exxon on Monday for similar reasons. Exxon Mobil lost 60 cents to finish at $78.60 a share.
Tuesday's flow of first-quarter earnings reports included London-based BP Plc (BP :67.76, -0.98, -1.4% ) . Europe's biggest oil producer said its profit for the three months ended March 31 fell 17% from a year ago. The company cited lower output and weaker prices for the weaker results. Nevertheless, BP lifted its dividend 10% to 61.95 cents per U.S.-listed share, roughly what analysts predicted. See full story. BP's U.S.-traded shares fell 1.4% to $67.76. Only Spain's Repsol S.A. (REP :34.08, -0.89, -2.5% ) saw a bigger percentage decline in the Amex oil group, tumbling 2.5% to $34.08.
Occidental Petroleum Corp. (OXY :51.44, -0.01, 0.0% ) reported first-quarter earnings of $1.21 billion, or $1.43 per share, slightly lower than its year-ago profit of $1.23 billion. The per-share results were identical at $1.43 for both quarters, however, since the company's buyback program has reduced the number of shares outstanding over the past 12 months.
Excluding one-time gains, Occidental posted earnings of $831 million, or 98 cents a share, for the three months ended March 31, down from $1.15 billion, or $1.34 a share, a year ago. Occidental blamed lower oil and gas prices for the weaker quarterly results, but they nevertheless topped the 91 cents a share analysts had expected. See full story.
Occidental shares fell a penny to close at $51.44. Energy Partners Ltd. (EPL:17.59, -1.17, -6.2%) was among the biggest decliners Tuesday, down 6.2% at $17.59, weighing on the Amex Natural Gas Index.
In the oil services group, BJ Services Co. (BJS : 28.72, -0.73, -2.5% ) led decliners on a 2.5% tumble to $28.72 on weaker-than-expected earnings.
BJ Services' fiscal second-quarter net income fell to $188.9 million from $203.5 million a year, hurt by overcapacity in the North American market. Per-share earnings nevertheless rose to 64 cents a share from 62 cents a year ago, due to a fewer shares on the market than a year earlier.
The results fell short of the 71 cents a share analysts polled by Thomson Financial had forecast.
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