Enerplus Corporation- Continued weakness in the commodity market has hurt the entire oil and gas sector with almost all the companies reporting net loss of late. Not surprisingly, Enerplus Corporation (NYSE: ERF) too had an unforgettable year with shares plummeting approximately 65% during the course. In fact, it shares took further beating in 2016 with year-to-date drop of 23%, due to oil carnage and weak fourth-quarter and full year results for 2015. Let us have a look. The oil & natural gas company for the fourth-quarter reported a net loss of $625 million or losses of $1.63 per share on the revenue of $148.8 million, down significantly from the prior year period. For the full year, its net loss came in at $1.52 billion in 2015 as compared …show more content…
It has revised its dividend to $0.01 per share, which will be effective from the first-quarter of 2016. This cut in its dividend will allow the company to save approximately $95 million in 2016 from its dividend level in 2015, eventually improving its liquidity position. Improving debt profile through sale of non-core assets ERF’s capital efficiency initiatives have been directed towards competitive assets and removal of non-core assets. And, as part of these initiatives the company has divested its non-core assets during this disorder in oil & gas price disorder to further strengthen its balance sheet. For instance, the oil & gas company divested approximately $286.6 million of its non-core assets across the United States and Canada. This includes sale of its Pembina waterflood assets in Canada and non-operated North Dakota properties in the U.S. The company plans to use these proceeds from the sale of non-core assets to pay its outstanding debt of $1.2 billion, which has slightly increased over $1.13 billion in 2014. In fact, Enerplus during the fourth-quarter repaid $103.2 million of its senior notes and thereby increased the amount drawn on its bank facility to $800 million that should support its liquidity in
Looking ahead, it plans to accelerate upstream earnings through this favorable volume and mix effect by way of new project execution and work programs coupled with reduced maintenance activities and higher seasonal demand. Also, the company is planning to further reduce operating costs for these new projects that should have a positive impact on its upstream earnings in 2016. Reducing operating costs and capital expenditure Exxon Mobil, meanwhile, continues to focus on core fundamentals such as reduction in operating costs and capital expenditure. For instance, the company achieved approximately $11.5 billion in capital and cash operating costs reductions. Also, the company’s ongoing asset management program, yielded $5.1 billion in cash flow from operations and asset sales.
• Both Caterpillar Inc. and John Deere & Co. experienced a very tumultuous 2015. They both experienced significant drops in revenues - 15.33% for Caterpillar, related to sales on machinery, energy, and transportation, 21.8% for John Deere, related to equipment operations - from 2014. John Deere may have taken the higher percentage loss, but Caterpillar took the larger dollar value hit. John Deere had a decrease of $7,204.1 million (consolidated income), while Caterpillar had a decrease of $8,173 million (consolidated income).
The global oversupply of crude affects Exxon. In the fourth quarters of last year, Brent and other crudes price were down sharply more than a third to an average of cost of $80 a barrel. This affected fourth quarter earnings. Exxon’s fourth quarter earnings fell 16%. Fortunately, most experts doubt the oil price will recover until half of the year although it recently increased more than 10 percent. Although the company experienced decline in revenue, it face to positive. Exxon faces to positive from its drilling, and has in a global-wide expansion and development plan.
Exxon Mobil was financially superior to most of its main competitors except for Royal Dutch Shell- British-Dutch company. The other main competitors include BP- from UK, Chevron and Conoco Philips- both from US and Total S.A. - a French company. Exxon Mobil reported net income in excess of 40 billion dollars in 2008 and 2009.
Both the CEO of Exxon, Lee Raymond, and the CEO of Mobil, Lucio Noto, announced that it is because of this reduction in prices and downsizing within the oil industry that the merger is taking place, the very nature of the oil industry was becoming increasingly competitive. The oil industry as whole was becoming more efficient, causing oil prices to fallr. Firms can only maintain their prices equal to or above marginal cost, and if prices are lower than marginal...
Over the years, the Exxon Mobil Corporation have repeatedly earned the ranking of a top-rated Fortune 500 company by flawl...
Company has been losing money since the first quarter of 1992. Financial fundamentals are sagging:
The United States located electronic company Electrocorp faced the problem of declining profitability due to rising production costs, specifically high wages, costly worker's safety and environmental standards. In order to solve this problem Electrocorp is deciding whether to relocate some of their plants to South Africa, Mexico, or the Philippines.
The next thing to analyze is the way GE is managing its assets. If you look at the numbers GE as a company has a 3.01 return on assets, while the industry has 6.10 return on assets. It seems that GE is not very efficient in converting its investments into profits. For example a short-term bond fund run by General Electric Co.'s GE Asset Management returned money to investors at 96 cents on the dollar after losing about $200 million, mostly on mortgage-backed securities (1). The GEAM Trust Enhanced C...
As we learn from the case study, the Lincoln Electric Company is the largest global manufacturer of machines for welding, which are used in all kinds of construction projects. This means that the company has a large global presence and many employees, so its culture affects thousands of its workers. Even though it is now 2014, the company still has a large market share and very satisfied employees, so clearly the culture leaves employees satisfied and motivates them to work hard for the company.
... CVX stock analysis as per above information, it becomes pretty clear that CVX stock and generally all other energy corporations are losing their value. For a bullish market and optimistic investors, the idea might be favorable in the sense that since the CVX stock prices have hit rock bottom in the recent weeks, it might lead to swing upwards due to the upward momentum of all the Energy stocks. The trap here however is that the CVX stock price, although they look underpriced, acceptable as value for investment, the earnings against such stocks have been in a downward loop since years, and the trend continued in year 2013. This would result in a downward pressures and price movement again in 2014, unless Chevron discretely or oil and energy sector as a whole shows some sign of improvements in terms of supply increase or price per barrel or refined product increasing.
Thirdly, serial borrowing and repurchase throughout several years is considered. This is essentially the financial policy the company has adopted these years. This policy is less risky measured by coverage ratios and is more acceptable to stockholders. However, UST has imminent challenges and value enhancing objectives to meet. If the company has debt capacity untapped upon, large sum repurchases avoid excessive advisory fee, negotiation time and effort, potentially credit rating charge while immediate significant tax shield benefit is made possible.
Upon examining P&G’s financial ability to meet short-term obligations, it is apparent that not only have their current liabilities exceeded current assets over the last three years, but close to half of their current assets have been tied up in inventories and other illiquid assets. For example, assessing both the quick and current ratio respectively shows that less than 70% of the firm’s current assets could be converted immediately to pay current commitments, but a little more than 90% of the firm’s liabilities would ultimately be covered. Though, based on industry average similar findings occur; therefore, it must not be uncommon for industries similar to P&G to
The oil & gas sector faces specific risks affecting its financial performances. The main variables affecting the industry are political, geological, price, fiscal, supply and demand as well as cost risks. Given the specific risks, the demand for energy is still gr...