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Energy Sector Update for 07/30/2018: OIS,SXE,AMID,KBR,DO


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Energy stocks extended their advance Monday afternoon, with the NYSE Energy Sector Index rising over 0.8% while shares of energy companies in the S&P 500 index climbed almost 0.9% as a group. In commodities trading, West Texas Intermediate crude oil for September delivery settled $1.44 higher at $70.13 per barrel at the New York Mercantile Exchange while the global benchmark Brent crude September contract advanced 58 cents to $74.87 per barrel. August natural gas futures rose 2 cents to $2.80 per 1 million BTU. Among energy-related ETFs, United States Oil increased more than 1.5% while United States Natural Gas was ahead over 0.7%. The Philadelphia Oil-Services Index added just under 2.0% in value today.

In industry news:

Crude oil prices settled sharply higher Monday, rising over 2% and topping $70 per barrel, supported by new worries demand will soon outstrip supplies as U.S. economic growth accelerates. Today's increase for September West Texas Intermediate crude follows a report Friday finding U.S. gross domestic product grew 4.1% on an annualized basis between April 1 to June 30, marking the fastest pace of growth in nearly four years and underpinning concerns demand is accelerating just as U.S. President Donald Trump threatens to remove Iranian output from the global market by hitting the OPEC member with new sanctions.

Among energy stocks moving on news:

+ Oil States International ( OIS ) surged on Monday, climbing as much as 10% despite the oilfield-equipment supplier missing analyst expectations with its Q2 revenue and posting net income for the April-to-June reporting period only matching Street views. Revenue grew to $285.8 million from $171.4 million last year but still trailed the Capital IQ consensus by around $3.6 million. The company also earned $0.05 per share to reverse a $0.28 per share net loss in the year-ago period. The stock also is getting a push higher from an upgrade today to Buy from Hold by analysts at Gabelli & Co.

In other sector news

+ Diamond Offshore Drilling ( DO ) rose as much as 6% on Monday after the marine oilfield-services company swung to a non-GAAP Q2 net loss, reversing a year-ago profit, but still beat Wall Street expectations. Excluding one-time items, the company posted a net loss of $0.33 per share during the three months ended June 30 compared with net income of $0.45 per share last year but still beating the Capital IQ consensus looking for a $0.39-per-share adjusted loss. Revenue fell to $268.9 million from $399.3 million last year, trailing the $279.8 million analyst mean.

+ KBR ( KBR ) was just over 4% higher late Monday afternoon, roughly halving a nearly 8% advance earlier in the session that followed the oilfield-support company reporting above-consensus Q2 revenue and per-share earnings that matched analyst estimates. It also raised its FY18 EPS outlook range by $0.05 and now exceeds Street view by at least $0.01 per share.

- Southcross Energy Partners ( SXE ) declined Monday, dropping over 3% and giving back a more than 15% gain previously in the session that followed the pipeline and logistics company Sunday terminating its proposed merger with American Midstream Partners ( AMID ). Under terms of the companies' merger agreement, Southcross will receive a $17 million break-up fee.

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

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This article appears in: Investing , Energy
Referenced Symbols: OIS , DO , KBR , SXE , AMID



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