On March 11, Dominion Resources announced it had reached an agreement to sell three merchant power plants to Energy Capital Partners, a private equity firm. The sale is expected to result in after-tax proceeds of approximately $650 million, roughly one third of the amount we had assumed when Dominion announced it would sell the facilities last September. The lower-than-expected cash proceeds from the sale represent a negative impact of $2 per share on our fair value estimate of $54 per share. The most valuable of the three power plants is the 1,528 MW Brayton Point Station in Somerset, Mass. Brayton…
Author: Ross Shultz
In March 2012 BP reached settlements that covered the substantial majority of economic loss and medical claims relating to the 2010 Macondo oil spill. At that time, BP estimated that payouts related to these settlements would reach $7.8 billion, a figure that could be covered by the $20 billion Gulf Coast Claims Fund (GCCF) that BP created in Macondo’s aftermath. In fact, the GCCF can sufficiently cover $10 billion worth of settlement claims before BP would have to take another charge against future earnings. Unfortunately for BP, it’s appearing that this $10 billion provision level is going to be tested,…
Delhaize posted its results for the full-year 2012 which have been in line with the analysts expectations of a long-term decline of the operating margin. The company’s EBIT margin declined by 100 basis points due to price investments caused by a competitive environment in the US food retailing business. In this way, because the company needed to stay competitive, the management had to cut the divident to 1.40 euro from 1.76 euro earlier. Delhaize’s full-year EBIT margin fell by 105 basis points to 3.45% in 2012, from 4.5% a year ago, almost in line with the forecasts. The decline, however,…
Rowan reported decent fourth-quarter results as it awaits delivery of its four deep-water rigs over the next two years. Revenue was $354 million, up 29% from last year’s levels due to new fleet additions (jackups) and higher levels of activity for its existing rigs. Thanks to healthy levels of operating leverage, operating income doubled over the same time frame to $61 million. Also during 2012, Rowan built out key support functions for its deep-water effort and entered into one deep-water contract; it now expects to contract its three remaining deep-water rigs without a contract in 2013, which is very good…
Essilor reported year-end results on Tuesday within analyst’s expectations. This quarter showed continued stability in the economically constrained markets of Europe and North America, while Essilor’s emerging market operations maintained strong double-digit growth. While analysts continue to appreciate Essilor’s growth opportunities and wide economic moat, shares remain overvalued, trading near 25 times the 2013 consensus EPS estimate. Essilor reported 12.8% revenue growth in the fourth quarter, including 3.6% organic growth and 6.9% growth from acquisitions. Revenue growth fell slightly below our forecast, likely from fewer gains from Hoya’s manufacturing issues. Management added seven new partnerships and continues to broaden its…
Sodexo reported fiscal 2013 first-quarter results that were largely on par with expectations. Revenue grew 7.4% to about EUR 4.95 billion in the quarter. However, favorable foreign exchange represented roughly half of this increase, as organic growth and acquisitions contributed only 2.1% and 1.1%, respectively. The relatively modest organic growth in the quarter can be partially attributed to difficult prior-year comparisons that include revenue from the Rugby World Cup in the United Kingdom and a sizable U.S. health-care contract subsequently lost in 2012. In light of these preliminary results, management reaffirmed its mediumterm objectives of 7% average annual revenue growth…
On Wednesday, Barclays announced that it had hired Hector Sants as head of the bank’s new compliance and government relations team, a position that had not previously existed.
Analysts were pleased with this news, as it may mean that Barclays is finally going to take compliance more seriously and, in doing so, will avoid the hefty regulatory fines and reputational damage that have plagued it in recent years. Sants certainly is qualified–he served as chief executive of the Financial Services Authority until June– and Barclays has set up a structure that should give him some real power.
STMicroelectronics said on Monday that it indends to leave its unprofitable wireless joint venture, ST-Ericsson, under its corporate strategic realignment plan. The company is still discussing the terms of its exit and cannot provide many key details. However, one thing is clear: STMicro’s departure from STE is long overdue; the joint venture has been losing ground (and investors’ money) right from . STE is built on the Nokia’s Symbian mobile OS, which saw its market share fall to 3% from 46% when STE began in 2009. STMicro’s struggle to maintain STE viable in front of a huge market share drop…