Chevron profits slip with oil price dip

RAMON, Calif., Fri Jul 27, 2012 – Chevron Corp., the second-largest U.S. oil company, reported a lower quarterly profit on Friday as oil prices weakened from a year earlier, though fatter refining margins cushioned the blow.
Second-quarter net income fell to $7.2 billion, or $3.66 per share, from $7.7 billion, or $3.85 per share, in the year-ago quarter.
The company’s upstream business – oil and gas production – posted an 18 percent profit drop to $5.6 billion, while its downstream refining business saw profit jump 80 percent to $1.88 billion.
Chevron said earlier this month that industry benchmark margins on the Gulf Coast rose more than $4 per barrel to $24.89, while West Coast margins improved to $21.32 per barrel, their highest three-month average in four years.
Chevron’s largest refinery is in Mississippi, with 330,000 barrels per day of capacity, while its two California plants can together refine 518,000 bpd.
Profits at larger rival Exxon Mobil Corp. fell short of expectations on Thursday as oil and gas output sagged and its chemical unit faced weak margins.
Shares in Chevron rose less than 1 percent in premarket trading.

Factory output and housing starts fall in March 0.2 percent

WASHINGTON, Tue Apr 17, 2012 – American manufacturing output slipped in March and groundbreaking on homes fell, casting a shadow over the economic outlook.

The Federal Reserve said on Tuesday factory production slipped 0.2 percent last month, dragging on overall industrial output which was unchanged from a month earlier.

“It looks pretty bad on the face of it,” said Tom Porcelli, an economist at RBC Capital Markets in New York.

Still, Porcelli said the factory sector, which has been a key driver of the economy’s recovery from the 2007-2009 recession, appeared to have enough momentum to continue growing.

Auto production, for example, increased 0.6 percent after rising 0.8 percent in February.

Housing starts slipped 5.8 percent in March to a seasonally adjusted annual rate of 654,000 units, the Commerce Department said in a separate report.

The long-moribund housing sector has showed signs of an incipient recovery in recent months, and homebuilding could add to economic growth this year for the first time since 2005.

Despite the drop in starts, the data suggests housing construction could still add to gross domestic product during the first quarter, said Millan Mulraine, a macro strategist at TD Securities in New York.

Pending homes sales dip 0.5 percent in February

WASHINGTON, Mon Mar 26, 2012 – Contracts to purchase previously owned homes unexpectedly fell in February, suggesting a further pullback in sales as the housing market struggles to regain its footing.

The National Association of Realtors said on Monday its Pending Home Sales Index, based on contracts signed in February, slipped 0.5 percent to 96.5, also implying a weak start to the spring selling season.

Economists polled by Reuters had expected signed contracts, which lead existing home sales by a month or two, to advance 1.0 percent after a 2.0 percent rise the prior month. Contracts signed were up 9.2 percent in the 12 months to February.

“This suggests a pretty weak start to the spring selling season. The warm weather in the winter seems to have pulled forward sales,” said Jacob Oubina, a senior U.S. economist at RBC Capital Markets in New York.

U.S. stocks held steady at higher levels after the data, while Treasury debt prices were lower.

Data last week showed sales of previously owned homes fell in February and the decline in signed contracts suggests home purchases could be weak again in March.

Other reports last week also showed declines in home building activity and new home sales in February. Despite the early signs of fatigue, both economists and realtors remain optimistic the housing market will recover this year.

Holiday discounts to hurt Williams-Sonoma profit, shares fall

SAN FRANCISCO ― Home goods retailer Williams-Sonoma Inc. said heavy discounting to attract bargain-hungry holiday shoppers would eat into its fourth-quarter earnings, sending its shares slipping as much as 15 percent.

Williams-Sonoma also outlined plans to return money to shareholders and shore up its stock, but the news failed to soften the blow of the weak outlook.

“We recognize that WSM is putting their cash to work in the form of a buyback as well as an increased dividend, but we simply believe investors will not ‘pay up’ for a margin-challenged business,” Piper Jaffray & Co analyst Neely Tamminga said in a client note.

Retailers, in general, have been resorting to profit-sapping discounts to lure shoppers in a still fragile economy.

“The ‘daily deals’ strategy, which was planned and intentional, did not drive the adjacent product sales,” said Tamminga, who downgraded the stock to “neutral” from “overweight”.

Tamminga also lowered her price target on the stock to $37 from $45 and said margin-squeezing discounts will remain a theme for the company in the future, with shoppers trained to seek value.

The operator of Williams-Sonoma cookware stores now expects to earn $1.10-$1.15 a share for the quarter, down from its previous forecast of $1.15-$1.20 a share. It projected revenue of $1.24-$1.26 billion for the period.