Investors who are looking for short-term profits should make sure that the names in the post below are on their radar for next week. They all appear to be outperforming the rest of the market during any rally. You are looking at the names my personal playbook would contain if I were going to be trading the markets this week.
ROCKVILLE, Md., Jan. 7 (UPI) -- Barr Pharmaceuticals Inc. has contracted BioReliance Corp. to support the production of vaccines for use by the U.S. Defense Department.
Brazilian energy giant Petroleo Brasileiro S.A. (PBR), or Petrobras S.A. announced encouraging third quarter results, helped by strong performance from the Supply segment. Earnings per ADR came in at R$1.66 (96 cents), comfortably beating the Zacks Consensus Estimate of 80 cents. However, on a year-over-year basis, Petrobras’ earnings per ADR was down approximately 28.7%, hurt by lower prices of oil and natural gas. Still, they were better than the high double-digit earnings decline suffered by other majors such as ExxonMobil Corp. (XOM), Chevron Corp. (CVX), and Royal Dutch Shell PLC (RDS.A).
Upstream
Total oil and gas production during the third quarter of 2009 reached 2,534 million oil-equivalent barrels per day, from 2,524 million in the previous quarter and 2,437 million in the same period of 2008. Compared to the third quarter of 2008, Brazilian oil and natural gas liquids production increased 4.8%, while international production was up 24.6%. However, Brazilian natural gas volumes were down 3.3% from the year-ago period, while international output during the quarter was down 6.0% year over year.
During the third quarter of 2009, the average sales price of oil in Brazil decreased 36.4% from the year-earlier period to $64 per barrel. Average sales price of international oil was down 16.9% year-over-year, reaching $57.16 per barrel. Regarding natural gas, average international sales price decreased 21.5% from the third quarter of 2008, while domestic price was down 61.5%.
Downstream
Refining costs per barrel in Brazil was down 2.6% to $3.37 and internationally, it fell 45.2% to $3.51. Lifting cost per barrel moved down 24.5% in Brazil to $22.86, while overseas costs rose 9.4% to $5.6. Petrobras exported an average of 724,000 barrels of oil per day, 10.2% higher compared to the same period last year.
Capital Spending & Balance Sheet
Year to date, Petrobras’ capital investments have reached R$50.7 billion. At the end of the September quarter, the company had cash and cash equivalents of R$30.1 billion and long-term debt of R$79.6 billion.
Segment Performance (Year to date)
E&P
The E&P segment earned R$13.1 billion during the first nine months of 2009, down 59.4% year over year, reflecting lower oil prices and the increase in exploration costs due to higher geological and geophysical expenses. These were somewhat negated by the 6% increase in average daily oil and NGL production and the lower government takes.
Supply
Segment earnings came in at R$12.1 billion as against a loss of R$2 billion in the first three quarters of 2008. The improvement over the previous-year period can be attributed to lower oil acquisition/transfer costs and reduced imported oil product costs, partly offset by lower export prices and, in Brazil, to the reduced price of those oil products pegged to international prices.
Gas & Energy
During the first nine months of 2009, Gas & Energy segment’s income reached R$718 million, compared to a loss of R$291 million in the year-earlier period. The positive comparison was due to reduced energy purchase costs, the greater availability of energy for trading, increased fixed revenue from auctions, and a reduction in the natural gas import/transfer cost. Partly offsetting these factors were reduced thermal power output due to higher hydroelectric reservoir levels and lower gas sales volume.
Distribution
Earnings in the Jan – Sep 2009 period reached R$949 million, up slightly (by 1.7%) from the same period previous year. The upturn in the operational results reflect an 11% increase in sales volume, mainly on the back of the inclusion of the commercial activities of Alvo Distribuidora. This was partly cancelled by narrowing of sales margins due to lower average sales price.
Yesterday before market opened, Companhia de Saneamento Basico do Estado de Sao Paulo - SABESP (SBS), one of the largest water and sewage service providers in the world based on the number of customers, announced encouraging results for the third quarter of 2009.
During the quarter, net operating revenue totaled R$ 1.6 billion, a 2.3% increase compared to the same quarter in 2008. Costs and expenses stood at R$ 1.2 billion, 11.1% higher than the same period in the previous quarter.
EBITDA dropped 11.5% year over year to R$ 617.1 million from R$ 697.4 million in the third quarter of 2008. Earnings before financial expenses (EBIT) decreased 30.2% year over year, from R$ 662.5 million to R$ 462.6 million in the quarter. During the quarter, gross operating revenue grew R$ 31.9 million, or 1.9%, from R$ 1.72 billion in the same period of 2008 to R$ 1.75 billion in the third quarter of 2009.
The main reasons for this increase were the 0.2% tariff adjustment as of September 2009 and the 0.7% growth in total billed volume. We are keeping our Outperform recommendation on SABESP ADRs unchanged at this stage. The short-term outlook for the company is solid, due to the September 2009 tariff adjustment and the recent appreciation of the Brazilian real.
The more relaxed monetary policy in Brazil is also very encouraging. Moreover, the company's non-cyclical and relatively low risk business model are also positive. The overall regulatory regime for water and sewage utilities in Brazil has improved considerably in recent times, reducing the regulatory risk of the industry in general and SABESP in particular. Read the full analyst report on "SBS" Zacks Investment Research
Spotlight On: Biotech The U.S. biotechnology industry includes about 1,000 companies, of all sizes, with combined annual revenues close to $50 billion. Large companies include Amgen, Biogen Idec, Genetech, Genzyme, Life Technologies and Monsanto. Because so many drugs are now developed using biotechnology, the biotech and pharmaceutical industries overlap. Demand for biotechnology products and services is driven primarily by the willingness of insurers to pay for new medical treatments. With the pending introduction of Obamacare, new uncertainties are introduced to this industry. Biotech products and treatments tend to be expensive and the drive to reduce costs through rationing will no doubt effect this industry. The profitability of individual companies depends on the discovery and effective marketing of new products. Because the market for potential[More...]
Looking back through 2008, the Healthcare sector has hit some huge hurdles. Patent concerns and expirations were worries for all major firms, the Department of Justice hit Med Tech with fines, Big Pharma made thousands of job cuts, Managed Care got demolished with enrollment cuts, and investors struggled to find much, if any safety in the whole sector. Going forward, 2009 will be quite an interesting year in the markets and the ever-so struggling economy. More M&A activity and consolidation will not only be seen within the Financials sector, but will also spread across other sectors. We have seen this ramp up quite a bit in Due to lofty predictions by some analysts regarding unforeseen buyouts of large Biotech firms by Big Pharma, heated debates on the Street will be prevalent. Some names that have been thrown out are Merck buying Gilead and Pfizer purchasing Amgen. Although those are pretty big bets, nonetheless, it will[More...]
One of Macro Man’s favourite themes at the moment is the necessity and likelihood of EM policy easing in response to the global recession and disinflationary/deflationary dynamic. For sure, most EM countries have eased policy to one degree or another- some of them aggressively. But a few EM CBs have stuck to their guns….for now. [...]
Companies featured in this segment: Electricity Generating Public Company Limited (BAK:EGCO), Sultan Mining, Energy Development Corporation (PSE:SLTN), AES Corporation (NYSE:AES), Korea Electric Power Corporation (SEO:015760), Continental AG (OTC:CTTAY), Pioneer Electronics Incorporated (TYO:6773), Sony Corporation (NYSE:SNE), Avnet Incorporated (NYSE:AVT), Arrow Electronics Incorporated (NYSE:ARW), Scottish & Southern Energy (LON:SSE), General Electric (NYSE:GE), Valero Energy Corporation (NYSE:VLO), Caterpillar (NYSE:CAT), Teva Pharmaceutical Industries Limited (NASDAQ:TEVA), Barr Pharmaceuticals Incorporated (NYSE: BRL)
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