Sector Update: Energy

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Energy stocks are mostly lower, with the NYSE Energy Sector Index sinking about 1.0% while shares of energy companies in the S&P 500 are down about 1.2% as a group. Crude oil for March delivery is up 89 cents at $97.62 per barrel while February natural gas is up 7 cents to $4.76 per 1 million BTU in a volatile day for both commodities.

In company news, shares of Valero Energy Corp ( VLO ) were narrowly lower Thursday, declining 0.1%, with the refiner's raising its guidance for Q4 earnings offset by Thursday's market selloff and an analyst downgrade of the company's stock.

VLO late Wednesday also said it was boosting its quarterly dividend by 11% to $0.25 per share, up from $0.225 in the prior quarter and payable March 12 to shareholders of record on Feb. 12.

The company Wednesday said it expects to report Q4 net income attributable to shareholders of $2.20 to $2.40 per share, which includes a nontaxable gain of $325 million, or $0.60 per share, stemming from its disposition of a retained interest in CST Brands Inc. Excluding the one-time item, net income attributed to shareholders is seen in a range of $1.60 to $1.80 per share.

Analysts polled by Capital IQ, on average, are expecting VLO to earn $0.93 per share during the three months ended Dec. 31, 2013. The company is scheduled to report earnings and other Q4 metrics on Wednesday, Jan. 29, prior to the market open.

Despite the upbeat outlook, VLO shares were cut to Outperform from Strong Buy by analysts at Raymond James, who kept their price target of $63 a share for the stock.

Shares have been trading in tight range either side of Wednesday's closing price at $50.95 each in recent trade, earlier swinging from a high of $52 a share - up more than 2% - soon after the markets opened Thursday to a mid-morning low of $50.35.

In other sector news,

(-) EGN, (-1.6%) Increases quarterly dividend by 3.4% to $0.15 per share, payable March 3 to shareholders of record on Feb. 14. On an annualized basis, the oil and gas company will pay $0.60 per share, up $0.02 from its prior yearly payout.

(-) NE, (-9.3%) Reports Q4 earnings of $0.82 per share, ex items, in-line with analyst estimates. Revenue climbs 20.8% year over year to $1.17 bln, also matching Street view.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: VLO

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