Exxon Mobil Profit Misses Estimate

Elena
27 Apr, 2006
New York City

Exxon Mobil, oil company, reported quarterly profit rose 7%, or $1.37 a share to $8.4 billion, up from $1.22 a share last year. The income increase was attributable to surging crude oil prices. Although it was the biggest profit ever posted in the first quarter, it failed to meet forecasts. Exxon Mobil shares fell 2.2% to $61.70 in pre-market trading.

[R]9:00 AM Stock futures indicated a negative market opening.[/R]
U.S. stock futures pointed to a sharply lower start, following the announcement that China raised its interest rates to 5.85%. Market sentiment was deeply hurt as the news came at a time when market seems worried about further interest rates increases, awaiting the Federal Reserve Chairman Ben Bernanke testimony before Congress about the U.S. economic outlook. A number of disappointing earnings from major companies also generated negative sentiment. Oil giant Exxon Mobil ((XOM)) reported Q1 net income rise of $8.4 billion or $1.37 per share from $7.86 billion or $1.22 per share last year, but came below analyst estimates of $1.46 per share. Phelps Dodge ((PD)) and Lucent ((LU)) also released quarterly declines. Dow component Microsoft ((MSFT)) is also due to release its quarterly results after market close. The software giant is expected to post income growth of 33 cents a share from 28 cents a year ago. Dow Jones futures were recently down 44 points, S&P 500 futures dropped 5.8 points, and Nasdaq 100 futures fell 7.5 points.

Crude oil prices declined on easing domestic supply concerns, although worries about Iran’s nuclear program weighed. Light sweet crude June delivery fell 64 cents to $71.29 a barrel. London Brent dropped 78 cents to $71.31. Gold prices sharply dropped after China raised its interest rates, raising concerns about lower demand. Gold traded at $631.70 per troy ounce from $637.50. The U.S. dollar was steady ahead of Ben Bernanke’s testimony before Congress. The euro traded at $1.2439, down from $1.2451. The dollar bought 114.70 yen, up from 114.69. The British pound was quoted at $1.7846, up from $1.7841.

Reynolds American, ((RAI)), tobacco company, reported Q1 earnings of $2.34 a share, up from $1.90 a share in the year-ago period. If not for non-recurring items, earnings would have been $1.89 a share, topping analyst estimate for earnings of $1.87 a share. The company affirmed its expectations for 2006 earnings of $8 to $8.40 a share.

OfficeMax Inc, ((OMX)), office products retailer, reported Q1 net earnings loss of 37 cents a share, down from a loss of 7 cents a share a year-ago. If not for special items, such as charges related to restructuring activities, the company would have posted earnings of 77 cents a share. Sales in Q1 advanced to $2.42 billion from $2.32 billion in the same period a year ago. Same-store sales were up 1.2%. If not for the charges, the company would have topped analysts’ estimate for a profit of 33 cents a share.

Janus Capital Group Inc., ((JNS)), asset manager, reported Q1 net income came to 17 cents a share, up from 9 cents in the year-ago quarter on revenue growth, matching analysts expectations for earnings of 17 cents a share.

Asbury Automotive Gorup Inc, ((ABG)), automobile retailer, reported Q1 earnings of 37 cents a share, up from 29 cents a share in the year-ago period. If not for non-recurring items, earnings would have risen to 43 cents a share from 37 cents a share. Revenue advanced 8% on new vehicle retail revenue rising 7% and used vehicle retail revenue increasing 13%. Same-store retail revenue advanced 6%. The company beat analysts’ expectations by a penny.

Coca-Cola Enterprises, ((CCE)), soda distributor, reported Q1 earnings of 3 cents a share, down from a profit of 10 cents a share a year-ago despite 3% revenue growth. Items, such as restructuring charges aside, the company earned 9 cents a share in Q1, in line with analyst estimate of analysts.

Rockwell Automation Inc, ((ROK)), maker of automation and control systems, reported that Q2 net income dropped to $146.5 million, or 81 cents a share, from $150 million, or 79 cents a share in the year-ago period, but in Q2 there were more outstanding shares. The company added its Q2 net income included 2 cents a share charge for legal matters. The company beat analysts’ forecasts for earnings of 75 cents a share.

Timken Co., ((TKR)), bearings manufacturer, reported that Q1 net income increased 13% to 70 cents a share, from 63 cents a share in the year-earlier period on revenue growth. Items not taken into account, net income advanced to 71 cents a share from 64 cents a share, topping analysts’ forecasts for earnings of 68 cents a share.


[R]8:15AM European averages dropped at mid-day.[/R]
European markets sharply declined at midday, reflecting weaker commodity and energy stocks, mixed earnings reports and deal talk involving companies like Siemens, Alcatel, and France Telecom. Metals prices moved lower after China lifted its base interest rate to 5.85%. Major mining companies like Rio Tinto and BHP Billiton sent the resource sector down 4%, while oil and gas giants Royal Dutch Shell and BP helped the energy sector down 2%. Alcatel fell 5.9% on lower profit, while Siemens dropped 3.1% after it agreed to buy Diagnostics Products Corp. for $1.86 billion. The German DAX 30 dropped 0.7%, the French CAC 40 lost 0.9%, and London FTSE 100 declined 0.8%.


[R]7:45AM Asia markets closed mixed.[/R]
Asian-Pacific benchmarks finished mixed. The Nikkei advanced on optimism about strong corporate earnings outlook, bolstered by upbeat quarterly results from Japanese companies and continuously falling oil prices. The index rose 0.3% to 17,114.54, supported by blue-chip automakers. Honda Motor reported record sales and profits to advance 5.3%, Nissan Motor was up 2.9%, and Toyota Motor rose 0.5%. Taiwan Weighted index reversed from earlier gains to close down 0.5% on profit taking in tech stocks which offset gains in financial and other companies. Hong Kong’s Hang Seng closed higher by 0.4%, boosted by property stocks. South Korea’s Kospi ended flat, but hit a new closing high.