Market News

Donnerstag, 4. August 2011

Sunoco Swings To 2Q Loss On Write-Down As Refining Operations Weaken

Sunoco Inc. (SUN) swung to a second-quarter loss amid weak refining revenue and a large write-down from the sale of its Philadelphia chemicals plant.

Shares still rose 2.5% to $36.80 after-hours after the company reported much better-than-expected revenue. The stock was off 11% this year through Thursday's broad sell-off.

Most U.S. refiners have posted improving earnings this year as a widening price spread between two types of crude oil helps boost industry margins. Sunoco missed out on the windfall in the first quarter, however, after widespread refinery outages.

Sunoco in July closed the sale of its phenol and acetone manufacturing plant in Philadelphia to an affiliate of Honeywell International Inc. (HON), forcing the company to set aside $118 million to write down the facility's assets.

The independent refiner also finished its spinoff of SunCoke Energy, the biggest independent producer of a raw material for steelmaking. Fitch Ratings and Standard & Poor's Ratings Services both pushed Sunoco's credit ratings into junk territory after the split, saying the spinoff removed one of the company's more stable segments.

Sunoco posted a loss of $125 million, or $1.03 a share, compared with a prior-year profit of $145 million, or $1.20 a share. Excluding the write-down provision and other items, the company posted a 40-cent profit, down from last year's $1.31 a share. Revenue rose 25% to $12.02 billion.

Analysts polled by Thomson Reuters expected a 47-cent per-share profit and revenue of $8.75 billion.

Sunoco's core refining and supply business swung to a loss in the latest quarter on lower realized margins and decreased production volumes, though the unit's crude utilization rate climbed to 84% from 74%.

Earnings in Sunoco's retail business fell 5.5% absent a favorable litigation settlement from last year as higher credit-card fees hurt profit.

Earnings jumped 80% in the logistics business on expanded crude oil volumes and revenue from recent acquisitions.

Mittwoch, 3. August 2011

CSN Axes Plans To Merge Iron Ore Assets, Reviews Namisa Expansion

RIO DE JANEIRO -(Dow Jones)- Brazilian steelmaker Companhia Siderurgica de Nacional SA (SID, CSNA3.BR), or CSN, has abandoned plans to merge its iron ore ventures in Brazil after two Japanese partners pulled out of one of them.

CSN said it has stopped negotiating the merger of its major Casa de Pedra mine with its Nacional de Minerios, or Namisa, mine assets and trading operation, as no accord on a merger was reached with partners. The company is now preparing a new business plan for Namisa's expansion, with revised dates and investment levels, which should be announced in the third or fourth quarter, a CSN director said on a conference call with analysts Wednesday.

CSN said two years ago that it planned to merge Casa de Pedra and Namisa and spin them off as a separate company in an initial public offering, in an effort to maximize the value of the assets amid strong global demand for iron ore, the key steelmaking ingredient. Since then, prices for the commodity have reached record highs on China-led demand. CSN sold off a minority stake to a group of Asian investors in Namisa in 2008.

One month ago, two of Namisa's Japanese partners, Nippon Steel (NISTY, 5401.TO) and Sumitomo Group, decided to sell their stakes in the iron ore company to the South Korean and Japanese partners who remained in the venture.

Nippon and Sumitomo quit as they didn't agree to the review of the Namisa development plan which is now underway, CSN mining director Ricardo Abramof said on the call.

"The expansion of Namisa is under discussion with the partners," Abramof said. "Namisa will produce 39 million tons a year of iron ore with some third-party purchases, and the capex is being discussed."

CSN plans to sell a total of 31 million metric tons of iron ore in 2011. The company is currently spending 4.2 billion Brazilian reais ($2.69 billion) on expanding Casa de Pedra to a production capacity of 50 million tons a year by 2015 and BRL2.5 billion to expand its port at Itaguai to handle 84 million tons a year, from both Casa de Pedra and Namisa, by 2014, Abramof said.

Casa de Pedra and Namisa are both located in Minas Gerais state in southeast Brazil. Itaguai is located in Rio de Janeiro state. CSN plans to build two pelletizing plants in Minas Gerais to process ore from its mines.

Dienstag, 2. August 2011

MARKET SNAPSHOT: U.S. Stock Losses Intensify After Senate Vote

NEW YORK (MarketWatch) -- U.S. stocks fell to their lowest levels of the session Tuesday as investors worried about the health of the economic recovery, even after the Senate approved the debt-ceiling bill and avoided a potential government default.

"The recent round of economic data has been disappointing," said Fred Dickson, chief investment strategist at Davidson Cos., pointing to a "small but growing risk that the economy might slide back into a very shallow recession."

Helping foster such fears, the Commerce Department reported consumers trimmed their spending in June for the first time in almost two years.

Extending its longest losing streak in more than a year, the Dow Jones Industrial Average (DJI) dropped 158.58 points, or 1.5%, to 11,951.91. It touched a low of 11,941.85 after the Senate vote.

The Standard & Poor's 500 Index (SPX) fell 23.04 points, or 1.8%, to 1,263.90.

The Nasdaq Composite Index (RIXF) declined 50.26 points, or 1.9%, to 2,693.35.

For every stock advancing, three fell on the New York Stock Exchange, where 632 million shares traded as of 2 p.m. Eastern.

Just hours before a potential default on the nation's debt obligations, the Senate on Tuesday approved legislation that would increase the U.S. debt ceiling and reduce planned budget deficits.

Following the vote, Fitch Ratings said that, with a deal in place to increase the U.S. debt ceiling, any risk of sovereign default -- "commensurate with [the U.S.'s] 'AAA' rating" -- remains extremely low.

Montag, 1. August 2011

FMC 2Q Net Up 63% On Strong Agricultural Products Demand

FMC Corp.'s (FMC) second-quarter profit grew 63% on higher sales for agricultural products and specialty chemicals, as the chemicals company Monday reported demand was particularly strong in rapidly developing economies.

But a weak outlook for the current quarter sent shares down 2.1% to $86.47 after-hours.

The company, which makes such products as insecticide and hydrogen peroxide, also raised the lower end of its full-year outlook by 10 cents, now seeing a profit of $5.60 to $5.80. FMC also predicted third-quarter earnings of $1.25 to $1.40 a share, compared with the $1.41 profit forecast by analysts surveyed by Thomson Reuters.

FMC's adjusted earnings have beaten expectations lately on broad growth. FMC also outperformed rivals during the recession because of its relatively low exposure to the industrial-chemicals sector, a market that struggles when the economy is pressured.

The company reported earnings of $107.2 million, or $1.49 a share, up from $65.7 million, or 90 cents a share, a year earlier. Excluding restructuring and other impacts, earnings climbed to $1.53 from $1.30. In May, the company projected a profit of $1.40 to $1.55.

Revenue grew 4.6% to $812.2 million. Analysts most recently expected $811 million.

Gross margin widened to 36.8% from 34.1%.

Pretax profit from continuing operations at FMC's largest business, agricultural products, increased 18% on a 12% jump in sales. Industrial chemicals profit was up 21%, while the figure improved 8.7% for specialty chemicals.

Honda falls on parts shortage but lifts guidance

TOKYO (Reuters) - Honda Motor Co posted a 90 percent fall in quarterly operating profit as a severe parts shortage stemming from the March 11 earthquake slashed output, but avoided an expected loss and raised its annual profit guidance by more than a third.

Japan's No.3 automaker said on Monday it made an operating profit of 22.58 billion yen ($292.5 million) in the April-June quarter, compared to a 234.4 billion yen profit a year earlier. The result was much better than the average estimate of a 67 billion yen loss in a survey of seven analysts by Thomson Reuters I/B/E/S.

It posted a net profit of 31.8 billion yen, down 88 percent from the previous year, while revenue fell 27 percent to 1.715 trillion yen.

For the full year to March 2012, the maker of Civic and Accord cars now expects operating profit, which excludes earnings from China, of 270 billion yen, or 35 percent more than the previous forecast of 200 billion yen. A poll of 21 analysts put the forecast at 407.7 billion yen.

Honda suffered the biggest drop in production from the March disasters due mainly to bad timing for the scheduled delivery of parts. The supply shortage coincided with the full remodeling this spring of its Civic model in the key U.S. market where sales of the popular car fell by a third in June.

Shares in Honda are down 4 percent in the year to date, underperforming a 1 percent drop in Tokyo's transport sector subindex . ($1 = 77.190 Japanese Yen)

(Reporting by Chang-Ran Kim; Editing by Matt Driskill)

Australian Manufacturing Declines In July: Survey

SYDNEY -- Australian manufacturing contracted in July, a survey out Monday complied by Australian Industry Group -- PwC showed. The performance of manufacturing index fell 9.5 points to 43.4 in July, falling below the 50-mark point that indicates contraction. Wood products and furniture was the weakest performing sub-sector of the survey and new orders fell 14.4 points to 40.2 in July. Difficulties facing manufacturing due to the high Australian dollar and sluggish domestic demand intensified in July, according to the survey.

China Official PMI Slips To 50.7 In July

HONG KONG -- An official reading of China's Purchasing Managers' Index slipped to 50.7 in July from 50.9 in June as manufacturing activity eased amid tighter monetary conditions, according to reports Monday. The measure, released by China Federation of Logistics and Purchasing, was higher than 50.1 expected in a Reuters survey. A reading above 50 indicates an improvement in manuacturing activity from the previous month, while one below shows a decline. A sub-index of input prices also declined to 56.3 during the month from 56.7 in June.