Reuters - Maersk weighs sale of Brazil oil and gas assets

A.P. Moller-Maersk (MAERSKb.CO) is considering selling its oil and gas business in Brazil as the shipping giant's energy group narrows operations in a restructuring, its chief executive said.

While the group has given itself two years to decide on the exact strategy, Maersk Energy is clearly focusing on its two major developments that are planned to start production in 2019 -- Culzean in the UK North Sea and the Statoil-operated Johan Sverdrup in the Norwegian North Sea.

"We have said that we will focus on fewer geographies and certainly in the North Sea. Norway and the U.K. will be an area of focus for Maersk Oil," Maersk Energy CEO Claus Hemmingsen told Reuters, speaking on the sidelines of the GE Oil and Gas annual meeting in Florence.

Maersk's assets in Brazil's offshore Campos basin -- a 20 percent stake in the Wahoo field and a 27 percent stake in Itaipu assets -- appear "on the fringe" of the company's portfolio, Hemmingsen said.

"It is not being marketed but we are looking through the portfolio."

The current value of the assets was unclear. The Danish company acquired three Brazilian blocks from SK Energy for $2.4 billion in July 2011 but in 2014 sold its stake in one and wrote down the value of the business by $1.7 billion.

Maersk is in the midst of a major restructuring to shift the company's focus to its transport and logistics businesses and separate its energy business in the face of a drop in income.

Maersk Energy also plans to break up its oil and gas exploration and production business, known as Maersk Oil, and its three other services businesses -- drilling, supply services and tankers, he said.

"We have three service companies of which many are top quartile if not leaders in their sector. We have three service companies that are all global. We have no intention to limit their presence in their global markets."

"However there is little to speak of in terms of synergies so we actually believe three stand-alone companies will be the best outcome. That could be achieved by mergers or de-merging them, that has yet to be decided. "

FT : Vestager backs Ireland to collect €13bn Apple tax bill

Vestager backs Ireland to collect €13bn Apple tax bill
EU competition commissioner is in Dublin to appear before committee of MPs

The EU’s competition commissioner said Dublin was working to collect €13bn in unpaid taxes from Apple despite the passing of the original deadline for making the payment.

Margrethe Vestager admitted that collecting the money was proving “complicated” because the sum was so large and because Ireland’s tax authorities were also seeking to work out their own calculations of how much the US technology company owed in unpaid taxes.

Ms Vestager was speaking in Dublin ahead of an appearance before a committee of Irish MPs investigating the shock European Commission ruling in August that Apple owed €13bn in unpaid taxes and that its tax arrangements in Ireland amounted to illegal state aid. Tim Cook, Apple chief executive, angered the MPs this month when he declined an invitation to address the committee.

Ms Vestager denied there was any attempt to single out US companies and said she was not concerned that the Apple ruling would affect US investment in Europe. But she insisted the Irish government had to collect the €13bn owed by Apple.

“The recovery [of the €13bn] has not been done yet, and the Irish authorities are moving forward to collect it,” she said. “It’s tricky to do because it is such a large sum. I appreciate that it is a complicated task.”

The Dublin government reacted furiously to the commission’s Apple findings, causing the biggest rupture between Ireland and the EU since the Irish financial crisis. The ruling has also infuriated Washington, which has accused the EU of unfairly targeting US companies in competition investigations.

Ireland and Apple, which employs nearly 6,000 people in the city of Cork, had been due to resolve the payment issue in early January by placing the money in an escrow account pending separate appeals by both parties against the commission’s finding. The appeals are expected to be lengthy, meaning the case is unlikely to be resolved for several years as it winds its way through the European courts.

Ms Vestager defended the commission’s declaration — which came after a three-year investigation — that two tax rulings offered to Apple by Ireland dating back to the early 1990s allowed the company to avoid tax on an unprecedented scale. She said the €13bn total was accurate “in round figures” and that the Dublin government knew the amount the commission found was owed by Apple would be large.

The adverse Apple ruling has highlighted Ireland’s 12.5 per cent headline rate of corporate tax, one of the lowest in Europe. The commission said the Apple case had nothing to do with the 12.5 per cent rate and was based solely on the special arrangements the company had with the Irish revenue commissioners.

However, John McGuinness, the committee’s chairman, said Apple “employs thousands of people in Ireland and this ruling could have far-reaching implications for multinationals in this country”.

Ms Vestager said the commission was investigating around 1,000 tax rulings offered by European governments to companies concerning the amount of tax they owed. There were no further “open” investigations into tax arrangements in Ireland or elsewhere. She said two separate investigations into McDonald’s and Amazon were “a high priority” for the commission but that their timing depended on “the contact and co-operation we get”.

>>> Exxon Mobil reports Q4 (Dec) results, revs in-line

--> XOM -0.13% 58k shares traded

Exxon Mobil reports Q4 (Dec) results, revs in-line
  • Reports Q4 (Dec) earnings of $0.41 per share, including about $2 bln in charges, may not be comparable to the Capital IQ Consensus of $0.71; revenues rose 2.0% year/year to $61.02 bln vs the $60.9 bln Capital IQ Consensus
    • As disclosed in the co's Q3 2016 Form 10-Q filing, continued weakness in the upstream industry environment during 2016, continued weak financial results for several assets in North America, and a reduction in the mid-point of the ranges of the corp's long-term oil and natural gas prices developed as part of its annual planning and budgeting cycle, led the corporation to conclude that the facts and circumstances supported performing an impairment assessment of certain long-lived assets, notably North America natural gas assets and certain other assets across the remainder of its Upstream operations..... results include an after-tax charge of $2 bln to reduce the carrying value of those assets to fair value. The asset groups subject to this impairment charge are primarily dry gas operations in the Rocky Mountains region of the United States with large undeveloped acreage positions.
Upstream:
  • Upstream earnings were a loss of $642 mln in Q4 of 2016, including an impairment charge of $2 bln mainly related to dry gas operations with undeveloped acreage in the Rocky Mountains region of the U.S.
  • Excluding the impairment charge, earnings were $1.4 bln, up $528 mln from Q4 of 2015
  • Higher liquids realizations partially offset by lower gas realizations increased earnings by a net $510 mln
    • Lower volume and mix effects decreased earnings by $50 mln. All other items, including lower expenses partly offset by the absence of favorable non-U.S. tax items from the prior year, increased earnings by $70 mln
  • On an oil-equivalent basis, production was down 127,000 barrels per day, or 3%, compared with the fourth quarter of 2015. Liquids production totaled 2.4 mln barrels per day, down 97,000 barrels per day as field decline and lower entitlements were partly offset by increased project volumes, notably in Nigeria and Indonesia
  • Natural gas production was 10.4 bln cubic feet per day, down 179 mln cubic feet per day from 2015 as higher project volumes were more than offset by field decline and lower entitlements
  • U.S. Upstream earnings were a loss of $2.3 bln in Q4 of 2016, including an impairment charge of $2 bln. Excluding the impairment charge, earnings were a loss of $301 mln, an improvement of $237 mln from Q4 of 2015. Non-U.S. Upstream earnings were $1.7 bln, up $291 mln from the prior year period.
Downstream:
  • Downstream earnings were $1.2 bln, down $110 mln from Q4 of 2015
  • Weaker refining and marketing margins decreased earnings by $570 mln, while favorable volume and mix effects increased earnings by $200 mln. All other items increased earnings by $260 mln as gains from divestments in Canada were partly offset by higher maintenance expense and unfavorable foreign exchange impacts.
  • Petroleum product sales of 5.5 mln barrels per day were down 173,000 barrels per day from the prior year mainly reflecting the divestment of refineries in California and Louisiana
  • Earnings from the U.S. Downstream were $270 mln, down $165 mln from Q4 of 2015. Non-U.S. Downstream earnings of $971 mln were $55 mln higher than prior year.

>>> MasterCard beats by $0.01, misses on revs

MasterCard beats by $0.01, misses on revs
  • Reports Q4 (Dec) earnings of $0.86 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.85; revenues rose 9.5% year/year to $2.76 bln vs the $2.79 bln Capital IQ Consensus.
    • An increase in switched transactions of 17%, to 15.2 billion;
    • A 9% increase in gross dollar volume, on a local currency basis and adjusting for the impact of recent EU regulatory changes, to $1.2 trillion;
    • An increase in cross-border volumes of 13%.

>>> UPS misses by $0.06, reports revs in-line; guides FY17 EPS below consensus

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UPS misses by $0.06, reports revs in-line; guides FY17 EPS below consensus
  • Reports Q4 (Dec) earnings of $1.63 per share, excluding large pension charge, $0.06 worse than the Capital IQ Consensus of $1.69; revenues rose 5.5% year/year to $16.93 bln vs the $16.99 bln Capital IQ Consensus.
    • US Domestic: Revenue increased $648 million to $10.9 billion, a 6.3% increase over 4Q15. Average daily shipments increased 5.0% to 19.6 million. 4Q 2016 operating loss of $570 million; adjusted operating profit was $1.3 billion.
  • Co issues downside guidance for FY17, sees EPS of $5.80-6.10 vs. $6.16 Capital IQ Consensus Estimate; the currency drag lowers the adjusted diluted EPS by $0.30 in 2017, and decreases the EPS growth rates by ~500 basis points.
  • "The investments in ORION and automation provided benefits during the quarter," said Richard Peretz, UPS chief financial officer. "However, bottom-line results were challenged by a shift in product mix and the continued softness in industrial production. Strong growth, combined with our network investments, provide UPS with great opportunities for many years to come."
  • Peer: FDX; customer: AMZN.

>>> Sprint misses by $0.02, beats on revs; sees FY17 profit at the high end of p

Sprint misses by $0.02, beats on revs; sees FY17 profit at the high end of prior range; lowers cap-ex
  • Reports Q3 (Dec) loss of $0.12 per share, $0.02 worse than the Capital IQ Consensus of ($0.10); revenues rose 5.5% year/year to $8.55 bln vs the $8.31 bln Capital IQ Consensus.
  • Adjusted EBITDA of $2.5 billion in the quarter compared to $1.9 billion in the year-ago period, an increase of 29%.
  • As part of its ongoing cost reduction program, the co modified the terms of its vendor agreements associated with the service and repair program on Jan. 1, 2017, which are expected to be accretive to Adjusted EBITDA by ~$25 million to $50 million per quarter. Under the terms of the new agreements, the co will now only record the net margin and therefore expects the reduction to wireless service revenues of ~$200 million per quarter to be more than offset by a greater reduction in cost of service expenses.
  • The co remains on track to achieve its goal of a sustainable reduction of $2 billion or more of run-rate operating expenses exiting fiscal year 2016 and has plans for further reductions in fiscal year 2017 and beyond. Sprint's focus on delivering the best value proposition in wireless resulted in 368,000 postpaid phone net additions in the quarter, its ninth consecutive quarter of year-over-year improvement.
  • Even in a highly competitive quarter with multiple promotional offers from its competitors, Sprint was able to add more postpaid phone customers than both Verizon and AT&T and report its highest postpaid phone net additions in four years. The company also remained postpaid net port positive for the third quarter in a row and had its highest postpaid phone gross additions in four years. The company also reported the following results: Total net additions were 577,000 in the quarter, including postpaid net additions of 405,000, prepaid net losses of 501,000, and wholesale and affiliate net additions of 673,000. Total postpaid churn was 1.67 percent and postpaid phone churn was 1.57 percent in the quarter.
  • The co now expects Adjusted EBITDA of $9.7 billion to $10 billion, at the high end of its previous expectation of $9.5 billion to $10 billion. The company now expects operating income of $1.4 billion to $1.7 billion, at the high end of its previous expectation of $1.2 billion to $1.7 billion. The co now expects cash capital expenditures, excluding devices leased through indirect channels, of $2 billion to $2.3 billion. The co's previous expectation was less than $3 billion. The company continues to expect Adjusted free cash flow around break-even.

>>> Zimmer Biomet beats by $0.03, reports revs in-line; guides FY17 EPS in-line,

Zimmer Biomet beats by $0.03, reports revs in-line; guides FY17 EPS in-line, revs in-line
  • Reports Q4 (Dec) earnings of $2.14 per share, $0.03 better than the Capital IQ Consensus of $2.11; revenues rose 4.1% year/year to $2.01 bln vs the $2.01 bln Capital IQ Consensus.
  • Co issues in-line guidance for FY17, sees EPS of $8.50-8.68 vs. $8.65 Capital IQ Consensus Estimate; sees FY17 revs of $7.855-7.930 bln vs. $7.91 bln Capital IQ Consensus Estimate.
  • "As we reflect on the completion of our first full year as a combined company, our achievements have further strengthened our confidence in the unique value-creation opportunity we offer in the dynamic global healthcare environment. We will continue to drive growth across our broad musculoskeletal portfolio in 2017, as we remain focused on delivering against our net synergy commitments and making ongoing progress towards optimizing and harmonizing our supply chain, and manufacturing and quality systems.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: DRYS +44.3%, JAGX +41.5%, DCIX +15.5%, SANM +10.9%, MNTA+8.3%, AEIS +6.9%, DHT +5.9%, WERN +5.8%, AUDC +5.8%, GTE +3.7%, AIRI+3.6%, SBGL +3.4%, MYL +3.2%, AU +3.1%, RACE +2.7%, PKG +2.4%, CHK+2.3%, HMY +2%, BBL +1.9%, ABX +1.9%, GG +1.8%, SLV +1.8%, SNE +1.6%,AUY +1.6%, GDX +1.6%, FCX +1.5%, NEM +1.5%, RDS.A +1.5%, GOLD +1.5%,BHP +1.4%, PBR +1.2%, AXE +1%, VALE +0.9%, X +0.9%, GGG +0.8%, COH+0.8%, DB +0.7%

Gapping down: RRTS -25.5%, UAA -22.7%, SDRL -17.3%, SMLP -7.5%, IDTI -7%,TEVA -6.8%, RMBS -5.4%, GBX -4.6%, RIGL -3.8%, PULM -3.8%, FIT -2.6%, CGI-2.5%, NKE -2.5%, VFC -2.4%, ABC -2.4%, GLBL -2.3%, HOG -2.3%, XRX -2.2%,CNXC -2.1%, CNXC -2.1%, M -1.6%, FL -1.5%, TMHC -1.5%, FHB -1.3%, ANF-1%, CR -0.8%, VRAY -0.7%, PFE -0.7%