Energy stocks moved higher Tuesday as crude prices remained in record territory and strong profit growth from Anadarko Petroleum and others provided a lift.
The Amex Oil Index (XOI: 1,514.80, -21.30, -1.4%) rose 2.3% to 1,536. The Amex Natural Gas Index (XNG: 698.57, -6.27, -0.9%) advanced 3.3% to 705. The Philadelphia Oil Service Index ($OSX: 320.86, -3.04, -0.9%) rose 2.4% to 324. Crude futures settled at $121.84 a barrel, up $1.87, or 1.6%, after setting a fresh all-time high of $122.73. Goldman Sachs analysts said prices are more likely to rise to the $150-$200 a barrel level within the next six to 24 months.
"We believe the current energy crisis may be coming to a head, as a lack of adequate supply growth is becoming apparent," said analysts at Goldman in a report.
Investors also digested several analyst actions. Hess Corp. (HES: 112.79, -4.07, -3.5%) rallied 8% to $116.86 after it received an upgrade to buy from neutral at Goldman Sachs. Goldman also downgraded Petrochina Co. Ltd. (PTR: 145.03, -11.70, -7.5%) to sell from buy. U.S.-listed shares in the Chinese oil company rose 46 cents to $156.73.
J.P. Morgan reduced its ratings on refiner Valero Energy (VLO: 47.61, -0.19, -0.4%) to neutral from overweight, and cut Sunoco (SUN: 44.63, -0.04, -0.1%) to underweight from neutral. Shares of Valero fell 3% to $47.90. Sunoco dropped 4% to $44.97.
Earnings lift
Among the many companies providing first-quarter profit updates, Anadarko Petroleum Corp. (APC: 76.68, +2.15, +2.9%) shares rallied 9.4% to $74.53 after it said first-quarter net income fell to $286 million, or 61 cents a share, compared with $1.72 billion, or $3.70 a share, a year ago. First-quarter income from continuing operations totaled $237 million, or 50 cents a share. Results from the year-ago quarter were inflated by nearly $1.7 billion in gains from asset sales.
Revenue for the three months ended March 31 fell to $2.98 billion from $5.25 billion.
Analysts polled by FactSet had predicted the Houston-based oil and gas producer would earn $1.20 a share on $3.08 billion in revenue. During the session, Anadarko hit a new 52-week high of $75.87, easily eclipsing the old mark of $71.12 on April 22.
Spectra Energy (SE: 26.03, -0.67, -2.5%) shares rose 3.3% to $26.70 after it announced a stock buyback, dividend boost, and a 56% jump in first-quarter profit. See full story.
W&T Offshore Inc. (WTI: 46.97, +1.62, +3.6%) rallied 6.3% to $45.35 after it said first-quarter net income soared to $79.8 million, or $1.05 a share, from $13 million, or 17 cents, a year ago, helped by a higher realized commodity prices. Excluding unrealized derivative losses, W&T posted income of $83.9 million, or $1.10 a share. The Houston oil and natural gas company said revenue increased 45% to $356.6 million from $246.5 million. On average, analysts polled by Thomson Reuters expected per-share earnings of 90 cents on revenue of $316.5 million.
Parker Drilling Co. (PKD: 7.96, -0.28, -3.4%) fell 1% to $8.24 after it said its first-quarter net income fell to $23.9 million, or 21 cents a share, from $30 million, or 27 cents a share in the year-ago period. The Houston-based drilling contractor said total drilling and rental revenues rose to $173.3 million from $151.3 million last year. Analysts polled by FactSet Research were looking for earnings of 18 cents a share on sales of $180.6 million. Parker Drilling said higher day rates and utilization in its overseas segment partially offset an expected softening in the U.S. barge-rig market.
Cimarex Energy Co. (XEC: 67.24, -0.74, -1.1%) , the Denver oil-and-gas producer, reported first-quarter net income more than doubled on 55% higher revenue. Earnings reached $149.8 million, or $1.76 a share, from $64.6 million, or 77 cents, in the year-earlier period. Revenue rose to $477.1 million from $306.9 million. More production -- an average of 8% more oil and gas daily -- and higher prices drove the improved results, Cimarex said. Cimarex shares rose 7.3% to $67.98.
In the alternative energy arena, Suntech Power (STP: 43.69, -0.61, -1.4%) jumped 6% to $44.30 after Jesup & Lamont analyst Brian C. Yerger initiated coverage of the solar panel manufacturer with a buy rating and a target price of $64 a share.
"Suntech has established a leading position in the rapidly growing solar manufacturing industry and continues to expand capacity," Yerger said in a note to clients. "As the clear leader in the Chinese solar group, we believe a premium valuation is warranted and recommend purchasing shares...as the company should continue to display strong top and bottom line growth."
ExxonMobil (XOM 88.82, -1.25, -1.4%) said it would spend $100 million to complete development and testing of an improved natural gas treating technology which could make carbon capture and storage more affordable and reduce greenhouse gas emissions. The oil giant plans to build a commercial demonstration plant near LaBarge, Wyoming. ExxonMobil shares rose 56 cents to $90.07.
The Amex Oil Index (XOI: 1,514.80, -21.30, -1.4%) rose 2.3% to 1,536. The Amex Natural Gas Index (XNG: 698.57, -6.27, -0.9%) advanced 3.3% to 705. The Philadelphia Oil Service Index ($OSX: 320.86, -3.04, -0.9%) rose 2.4% to 324. Crude futures settled at $121.84 a barrel, up $1.87, or 1.6%, after setting a fresh all-time high of $122.73. Goldman Sachs analysts said prices are more likely to rise to the $150-$200 a barrel level within the next six to 24 months.
"We believe the current energy crisis may be coming to a head, as a lack of adequate supply growth is becoming apparent," said analysts at Goldman in a report.
Investors also digested several analyst actions. Hess Corp. (HES: 112.79, -4.07, -3.5%) rallied 8% to $116.86 after it received an upgrade to buy from neutral at Goldman Sachs. Goldman also downgraded Petrochina Co. Ltd. (PTR: 145.03, -11.70, -7.5%) to sell from buy. U.S.-listed shares in the Chinese oil company rose 46 cents to $156.73.
J.P. Morgan reduced its ratings on refiner Valero Energy (VLO: 47.61, -0.19, -0.4%) to neutral from overweight, and cut Sunoco (SUN: 44.63, -0.04, -0.1%) to underweight from neutral. Shares of Valero fell 3% to $47.90. Sunoco dropped 4% to $44.97.
Earnings liftAmong the many companies providing first-quarter profit updates, Anadarko Petroleum Corp. (APC: 76.68, +2.15, +2.9%) shares rallied 9.4% to $74.53 after it said first-quarter net income fell to $286 million, or 61 cents a share, compared with $1.72 billion, or $3.70 a share, a year ago. First-quarter income from continuing operations totaled $237 million, or 50 cents a share. Results from the year-ago quarter were inflated by nearly $1.7 billion in gains from asset sales.
Revenue for the three months ended March 31 fell to $2.98 billion from $5.25 billion.
Analysts polled by FactSet had predicted the Houston-based oil and gas producer would earn $1.20 a share on $3.08 billion in revenue. During the session, Anadarko hit a new 52-week high of $75.87, easily eclipsing the old mark of $71.12 on April 22.
Spectra Energy (SE: 26.03, -0.67, -2.5%) shares rose 3.3% to $26.70 after it announced a stock buyback, dividend boost, and a 56% jump in first-quarter profit. See full story.
W&T Offshore Inc. (WTI: 46.97, +1.62, +3.6%) rallied 6.3% to $45.35 after it said first-quarter net income soared to $79.8 million, or $1.05 a share, from $13 million, or 17 cents, a year ago, helped by a higher realized commodity prices. Excluding unrealized derivative losses, W&T posted income of $83.9 million, or $1.10 a share. The Houston oil and natural gas company said revenue increased 45% to $356.6 million from $246.5 million. On average, analysts polled by Thomson Reuters expected per-share earnings of 90 cents on revenue of $316.5 million.
Parker Drilling Co. (PKD: 7.96, -0.28, -3.4%) fell 1% to $8.24 after it said its first-quarter net income fell to $23.9 million, or 21 cents a share, from $30 million, or 27 cents a share in the year-ago period. The Houston-based drilling contractor said total drilling and rental revenues rose to $173.3 million from $151.3 million last year. Analysts polled by FactSet Research were looking for earnings of 18 cents a share on sales of $180.6 million. Parker Drilling said higher day rates and utilization in its overseas segment partially offset an expected softening in the U.S. barge-rig market.
Cimarex Energy Co. (XEC: 67.24, -0.74, -1.1%) , the Denver oil-and-gas producer, reported first-quarter net income more than doubled on 55% higher revenue. Earnings reached $149.8 million, or $1.76 a share, from $64.6 million, or 77 cents, in the year-earlier period. Revenue rose to $477.1 million from $306.9 million. More production -- an average of 8% more oil and gas daily -- and higher prices drove the improved results, Cimarex said. Cimarex shares rose 7.3% to $67.98.
In the alternative energy arena, Suntech Power (STP: 43.69, -0.61, -1.4%) jumped 6% to $44.30 after Jesup & Lamont analyst Brian C. Yerger initiated coverage of the solar panel manufacturer with a buy rating and a target price of $64 a share.
"Suntech has established a leading position in the rapidly growing solar manufacturing industry and continues to expand capacity," Yerger said in a note to clients. "As the clear leader in the Chinese solar group, we believe a premium valuation is warranted and recommend purchasing shares...as the company should continue to display strong top and bottom line growth."
ExxonMobil (XOM 88.82, -1.25, -1.4%) said it would spend $100 million to complete development and testing of an improved natural gas treating technology which could make carbon capture and storage more affordable and reduce greenhouse gas emissions. The oil giant plans to build a commercial demonstration plant near LaBarge, Wyoming. ExxonMobil shares rose 56 cents to $90.07.
SOURCE: MarketWatch|by Steve Gelsi
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