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business newsBP Still Stuck 20,000 Leagues Under the Sea?
By
Justin Sharon
Feb 01, 2011 3:00 pm
Overall earnings came in below Street forecasts, and several equity analysts say BP may struggle to find attractive buyers for two of the US assets it aims to divest.
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Certainly BP's results paled in comparison with other upstream oil giants, not least of all Exxon Mobil's (XOM) own earnings only yesterday. "The market may be slightly underwhelmed by the lack of a more radical restructuring plan but with Macondo still an ongoing issue it may be too early for BP to implement more radical plans." Such was the post-quarter assessment of Richard Griffith, an analyst at Evolution Securities. Revolution rather than evolution is surely what BP needs now.
Shares in Baidu Inc (BIDU) are surging more than 8% as I write after China's biggest Internet search engine reported quarterly revenues and earnings per share that beat Street estimates by 3% and 11%, respectively. In retrospect it was clearly no accident that Facebook's Mark Zuckerberg made a beeline for Baidu's Beijing offices on his Chinese trip last month, since Baidu CEO Robin Li said on a conference call with investors today that, “Social search products represent a significant portion of our total traffic and it continues to grow at a rapid speed.” Ample growth opportunities also exist in mobile search and online video going forward. Given the unpleasant experience of Google (GOOG) in China last year, it is clear that the authorities there will do all they can to protect the hometown hero. In taking its 12-month price target up to $142 from only $118, brokers Kaufman Brothers noted that active advertisers grew 24% on a year-over-year basis to 276,000 and average revenue per customer rose 62% annually. Spoilsports will point out that a lower-than-expected tax rate undeniably helped and that traffic at Baidu's e-commerce division, launched a little over two years ago, remains relatively anemic. Shares, up over 170% in only 12 months, also aren't exactly inexpensive on any metric. Still, among the large segment of investors who do the math and quickly conclude that China + Anything Internet-Related = A Sure Thing, the stock still appears to be a license to make money.
Also check out Baidu Earnings Confirm It’s a Titan of Tech Stocks and The Most Compelling Stocks Out of China.
I’ll let readers weigh in on whether Nadia Ackerman of United Parcel Service, Inc. (UPS) or Anabel Winitsky of Cisco Systems, Inc. (CSCO) has corporate America’s most mellifluous voice, but in terms of their respective share price action this afternoon, it's no comparison. While the high-tech Dow darling is performing well enough itself today, it's the delivery outfit and key economic bellwether that's clearly in the catbird seat. Shares are more than 3% higher after fourth quarter (December) per share earnings of $1.08 excluding extraordinary items beat Street forecasts by $0.03. Revenues, meanwhile, rose 8.4% on an annual basis and average daily package volume, another key metric, gained 1.7% during the quarter on solid showings in both Next Day Air and Ground. International -- especially China and Germany -- was again a standout and investors are also applauding the company's statement that, "We plan to significantly ramp up share repurchases, to roughly $2 billion in 2011."
Turn to What UPS Earnings Say About the Economy; FedEx, UPS Predictors of Potential Market Weakness; and Why the USPS Is Destined to Fail for more.
Western Union Co. (WU), having invented the stock ticker in 1869, will surely hope its shares go north in a hurry tomorrow morning. The Colorado company, which reports its earnings after the close, gained 2.68% yesterday in anticipation of relatively strong results. This money transfer and payment service provider, a solid rather than spectacular performer over the past year, is expected to report earnings per share of $0.35 on revenue of $1.33 billion. Its trailblazing telegrams, introduced as long ago as 1851 before ultimately being killed off by email five years ago, once informed a waiting world of heralded ships going down and hydrogen bombs blowing up. Among its other achievements was the unlikely introduction of singing telegrams in 1933, during the depths of the Great Depression when the only tune most people could afford to carry was “Brother, Can You Spare a Dime?” Western Union processes almost five times the number of transactions as closest competitor MoneyGram International (MGI), a small-cap equity which is surging itself this afternoon. The market for remittances remains a key cash cow, with approximately 200 million people worldwide living outside their country of origin. Immigrant populations have historically propelled money-transfer growth higher by about 8% annually and the firm's network of over 400,000 agents is unmatched in its industry. Concerns include an expansion in alternative channels for wiring cash such as cell phones, and a decline in the construction industry which has slowed growth in the highly profitable USA-Mexico corridor.
Western Union on Your Cell Phone? has additional insight.
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No positions in stocks mentioned.
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