>>> Freeport-McMoRan misses by $0.10, beats on revs

Freeport-McMoRan misses by $0.10, beats on revs

Reports Q4 (Dec) earnings of $0.25 per share, $0.10 worse than the Capital IQ Consensus Estimate of $0.35; revenues fell 11.0% year/year to $5.24 bln vs the $4.89 bln consensus.
  • Fourth-quarter 2014 consolidated copper sales of 972 million pounds were lower than Q4 2013 sales of 1.14 billion pounds, primarily reflecting the sale of Candelaria in November 2014 and lower sales from Cerro Verde and Indonesia, partly offset by higher sales from North America.
  • Fourth-quarter 2014 sales were ~3% lower than the October 2014 estimate of 1.0 billion pounds, primarily reflecting lower production from Indonesia as a result of labor-related work stoppages during the period.
  • Fourth-quarter 2014 sales from oil and gas operations of 12.1 MMBOE, including 8.1 million barrels (MMBbls) of crude oil, 20.9 billion cubic feet (Bcf) of natural gas and 0.6 MMBbls of natural gas liquids (NGLs), were lower than fourth-quarter 2013 sales of 16.6 MMBOE because of the sale of the Eagle Ford properties in June 2014, but were higher than the October 2014 estimate of 11.5 MMBOE, reflecting strong well performance and reduced downtime.
  • FCX is taking aggressive actions to reduce or defer capital expenditures and other costs and has initiated efforts to obtain third-party funding for a significant portion of its oil and gas capital expenditures to maintain financial strength and flexibility in response to recent sharp declines in oil prices.
  • In addition, FCX is monitoring copper markets and will be responsive to market conditions. As a first step, FCX has reduced budgeted 2015 capital expenditures, exploration and other costs by a total of $2 billion.
  • Following the recent sharp decline in oil prices, FCX has taken steps to significantly reduce capital spending plans and near-term oil and gas growth initiatives in order to preserve cash flows and resources for anticipated improved market conditions in the future.
  • Operating cash flows totaled $1.1 billion for fourth-quarter 2014 and $5.6 billion (net of $0.6 billion in working capital uses and changes in other tax payments) for the year 2014.
  • Based on current sales volume and cost estimates and assuming average prices of $2.60 per pound for copper, $1,300 per ounce for gold, $9 per pound for molybdenum and $50 per barrel for Brent crude oil, operating cash flows for the year 2015 are estimated to ~ $4 billion.

>>> Norway Gov. holdings

TELENOR ASA TEL NO EXCH 810,264,928 0 53.97 17.73BLN
DNB ASA DNB NO EXCH 553,791,613 0 34.00 7.78BLN
YARA INTERNATIONAL ASA YAR NO EXCH 100,026,133 0 36.21 5.18BLN
NORSK HYDRO ASA NHY NO EXCH 708,865,253 0 34.26 3.98BLN
KONGSBERG GRUPPEN ASA KOG NO EXCH 60,001,600 0 50.00 1.01BLN
SAS AB SAS SS Co File 47,000,000 0 14.29 98.79MLN

>>> US Early premarket gappers

Early premarket gappers

Gapping up: SIMG +22.4%, EROC +7.8%, PLOW +6.7%, LXK +5.5%, GIGA +2.6%, VA +1.8%, CYRN +1.8%, NVS +1.8%, TASR +1.5%, YELP +1.4%, AZN +1.4%, SHBI +1.4%, CIT +1.2%, TXN +0.9%, WAT +0.8%, AAL +0.7%

Gapping down: NBG -17.4%, MSTR -10.7%, JOE -9.1%, MSFT -7.4%, SANM -6.7%, PKG -6.5%, PHG -5.6%, PLT -4.1%, DB -4%, RMBS -2.9%, AUDC -2.8%, UTX -2.5%, PG -2.4%, STO -2.1%, ZION -2.1%, ING -2%, DDD -2%, HPQ -1.8%, PFE -1.8%, TDG -1.8%, RBS -1.7%, INTC -1.7%, NVCN -1.6%, SAN -1.6%, CS -1.5%, AMD -1.5%, DD -1.5%, RIG -1.4%, AA -1.4%, EPRS-1.1%, KLAC -1.1%, SDRL -1.1%, TOT -1%, PII -1%

>>> Bristol-Myers beats by $0.05, beats on revs; guides FY15 EPS below consensus

Bristol-Myers beats by $0.05, beats on revs; guides FY15 EPS below consensus, revs below consensus

Reports Q4 (Dec) earnings of $0.46 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus Estimate of $0.41; revenues fell 4.1% year/year to $4.26 bln vs the $4.03 bln consensus.
  • Co issues downside guidance for FY15, sees EPS of $1.55-1.70 vs. $1.73 Capital IQ Consensus Estimate; sees FY15 revs of $14.4-15.0 bln vs. $15.6 bln Capital IQ Consensus Estimate.
  • Sees full-year gross margin as a percentage of revenues of approximately 74%
  • Reports Q4 Product Revs
    • Baraclude $341 mln
    • Hepatitis C Franchise $207 mln
    • Reyataz $318 mln
    • Sustiva Franchise $407 mln
    • Erbitux $181 mln
    • Sprycel $398 mln
    • Yervoy $366 mln
    • Abilify $476 mln
    • Orencia $476 mln
    • Eliquis $281 mln

>>> Lockheed Martin beats by $0.16, beats on revs; guides FY15 EPS below consens

Lockheed Martin beats by $0.16, beats on revs; guides FY15 EPS below consensus, revs in-line

Reports Q4 (Dec) earnings ex items of $3.01 per share, $0.16 better than the Capital IQ Consensus Estimate of $2.85; revenues rose 8.6% year/year to $12.53 bln vs the $11.9 bln consensus.
  • Co reported fourth quarter 2014 net sales of $12.5 billion compared to $11.5 billion in the fourth quarter of 2013. Net earnings from continuing operations in the fourth quarter of 2014 were $904 million, or $2.82 per diluted share, compared to $488 million, or $1.50 per diluted share, in the fourth quarter of 2013.
  • Fourth quarter 2014 net earnings from continuing operations included a special charge for a non-cash goodwill impairment of $119 million, which decreased net earnings by $107 million, or $0.33 per diluted share, partially offset by a decrease in income tax expense due to the retroactive reinstatement of the U.S. research and development tax credit for 2014, which increased earnings $45 million, or $0.14 per diluted share
  • Co issues guidance for FY15, sees EPS of $10.80-11.10 vs. $11.49 Capital IQ Consensus Estimate; sees FY15 revs of $43.5-45.0 bln vs. $44.33 bln Capital IQ Consensus Estimate.

>>> Microsoft shares lower by 7% following in line earnings

Microsoft shares lower by 7% following in line earnings
Microsoft (MSFT $43.40 -3.61) shares are trading lower by 7% after the company reproted second quarter GAAP EPS of $0.71 which is line with estimates, while revenues rose 8% to $26.47 billion which is roughly in line with estimates. EPS include $0.06 in unfavorable items ($0.02 from restructuring/integration and $0.04 from an IRS tax adjustment).

Devices and Consumer revenue grew 8% to $12.9 billion, with the following business highlights: Surface revenue of $1.1 billion, up 24%, driven by Surface Pro 3 and accessories Office 365 Home and Personal subscribers increased to over 9.2 million, up 30% sequentially over prior quarter Search advertising revenue grew 23%, with Bing U.S. market share at 19.7%, up 150 basis points over prior year Xbox console sales totaled 6.6 million units, with strong holiday season performance Phone Hardware revenue of $2.3 billion, with 10.5 million Lumia units sold driven by growth in affordable smartphones Windows OEM Pro revenue declined 13%; revenue was impacted by the business PC market and Pro mix returning to pre-Windows XP end of support levels and by new lower-priced licenses for devices sold to academic customers Windows OEM non-Pro revenue declined 13%, with license growth from opening price point devices Commercial revenue grew 5% to $13.3 billion, with the following business highlights: Commercial cloud revenue grew 114% driven by Office 365, Azure and Dynamic CRM Online, and is now on an annualized revenue run rate of $5.5 billion Office Commercial products and services revenue declined 1%; transactional revenue was impacted by the continued transition to Office 365 and declines in commercial PCs following the XP refresh cycle Server products and services revenue grew 9%, with double-digit growth of SQL Server and System Center Windows volume licensing revenue increased by 3%, with annuity revenue growth partially offset by declining transactional revenue. Co also announced its intention to complete the existing $40 bln share repurchase authorization by Dec 31, 2016.

On the conference call, the company provided third quarter revenue guidance of $20.6-21.4 billion which is below estimates. Guidance is based on co's current view of FX rates; should US dollar continue to strengthen co would see a negative impact to earnings, revenue, and the balance sheet; co sees a 4 point headwind due to FX; co expects gross margin to be lower of the next couple of quarters Devices and consumer In licensing revs expected between $3.4-3.6 bln, In computing and gaming revs expected between $1.5-1.7 bln In phone hardware revs are expected to be $1.4-1.5 bln. Other revs expected between ~$2 bln Commercial Co sees commercial licensing revs of $9.7-9.9 bln Co sees commercial other revs of $2.6-2.7 bln.

MSFT shares are trading higher by 27% over the last 12 months. If today's downtrend continues look for support near the $42.50-43.00 area
.

>>> Caterpillar misses by $0.22, reports revs in-line; guides FY15 EPS below con

Caterpillar misses by $0.22, reports revs in-line; guides FY15 EPS below consensus, revs below consensus

Reports Q4 (Dec) earnings of $1.35 per share, excluding non-recurring items, $0.22 worse than the Capital IQ Consensus Estimate of $1.57; revenues fell 1.1% year/year to $14.24 bln vs the $14.18 bln consensus.
  • Co issues downside guidance for FY15, sees EPS of $4.75, excluding items, vs. $6.71 Capital IQ Consensus Estimate; sees FY15 revs of $50 bln vs. $54.87 bln Capital IQ Consensus Estimate.
    Sales declines in Construction Industries and Resource Industries were nearly offset by increases in Energy & Transportation. Resource Industries were nearly offset by increases in Energy & Transportation
  • "We expect world economic growth to only improve modestly in 2015. The relatively slow growth in the world economy and continued weakness in commodity prices—particularly oil, copper, coal and iron ore—are expected to be negative for our sales. We expect sales and revenues in 2015 to be about $50 billion. To provide a better understanding of our expectations for 2015 profit, we are providing our outlook with and without anticipated restructuring costs."
  • "Over the past two years, we have undertaken restructuring activities designed to lower our long-term cost structure. Additional restructuring actions are anticipated in our outlook for 2015. In addition to improved profit, Machinery, Energy & Transportation (ME&T) operating cash flow was higher than we expected and the third best year in our history," Oberhelman said.
  • It was a great year for Energy & Transportation with record sales and profit. Sales were also up and profit improved substantially in Construction Industries. The increase in Construction Industries' sales was primarily in North America and was partially offset by sales declines in other regions. While the co's construction sales were up in 2014, the industry is still well below prior peaks in every major region due to relatively weak economic growth for most of the world."
  • Prices for key mined commodities, particularly copper, coal and iron ore, declined in 2014. Weakening commodity prices, along with improved mine productivity, led to lower sales for Resource Industries.
  • "We haven't seen evidence of an upturn in equipment orders yet—and sales of mining equipment remain depressed," Oberhelman added."

Blackstone sets up new credit fund to seek undervalued oil and gas assets

EXCLUSIVE-Blackstone sets up new credit fund to seek undervalued oil and gas assets - RTRS


NEW YORK, Jan 27 (Reuters) - Blackstone Group LP BX.N, the world's largest alternative asset manager, is raising its first energy-focused credit fund, according to people familiar with the matter, the latest sign that private equity firms are seeing investment opportunities among distressed energy assets.

The move indicates Blackstone is betting that the bonds of some exploration and production companies that rode North America's oil and natural gas boom are now undervalued, or could be in the near future, following the plunge in crude oil prices. (Full Story)

Not only has the oil price collapse put acute pressure on energy companies with weak balance sheets or high production costs, it has also hurt sales for related services companies that sell everything from sand to drilling rigs to temporary housing. (Full Story)

GSO Capital Partners LP, Blackstone's credit investment arm, has approached many of its existing investors to quickly raise between $500 million and $1 billion to invest in traded debt securities in the energy sector, the sources said.

A Blackstone spokesman declined to comment. The sources asked not to be identified because the fundraising is confidential.

GSO’s new corporate energy credit fund is just the latest in a series of such funds being raised in the aftermath of oil prices falling more than 50 percent since the middle of last year. Apollo Global Management LLC APO.N, for example, disclosed in a regulatory filing last week that it was raising a new fund to invest in less liquid or illiquid credit products in energy businesses.

POTENTIAL FOR LARGE RETURNS

Unlike Apollo's fund, though, the new GSO fund will invest primarily in the liquid corporate energy credit markets. This means it will seek to buy the traded debt of energy companies for the most part, rather than lend to them directly.

"If you buy something that has a 12 percent yield to maturity, and the maturity is for ten years, but oil prices recover in two or three years, you will make a 25 percent rate of return over a two- or three-year time frame," one of the sources said.

One strategy that GSO's new energy credit fund will deploy is to invest in companies, some private equity-owned, whose bonds are trading at distressed levels. This could put GSO in a position to take an equity stake through the restructuring of a company’s debt and benefit from any recovery in its valuation.

"It's going to be a very quick market dislocation and it may be relatively short-lived. You have to have enough experience in this sector to time it effectively," said Andrea Kramer, a managing director at Hamilton Lane Advisors LLC, which has over $220 billion in assets under management and supervision.

The new GSO credit fund will be looking to balance its portfolio by investing in lower-risk, lower-return debt securities, according to the one source.

Buyout firms raised $17.5 billion globally in 2014 for private equity funds dedicated to natural resources, according to market research firm Preqin. Blackstone has just finished raising its second energy-focused buyout fund, amassing $4.5 billion. The New York-based firm began raising that fund in the first half of 2014, before oil prices started to slide precipitously in the second half.

Leveraged buyouts of energy companies, however, have been few and far between, because lower valuations have made owners reluctant to sell. Any decreases in exploration activity as a result of the lower oil prices also means there could be fewer opportunities for private equity firms wanting to provide seed capital to new oil and gas companies.

GSO already has a dedicated energy team that makes investments in the sector, using capital from general credit funds. Earlier this month, for example, GSO's rescue-lending fund and related vehicles agreed to commit up to $500 million for five years to fund the drilling program of oil and natural gas exploration company LINN Energy LLC LINE.O. (Full Story)

GSO, together with Franklin Square Capital Partners, also manages FS Energy & Power Fund, a business development company that invests in the debt and equity securities of private U.S. energy and power companies