Profits continue to soar for oil companies
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Royal Dutch Shell PLC came close to matching Exxon Mobil Corp.?s 36 percent quarterly earnings boost on Thursday, posting net income of $7.3 billion, an increase of 40 percent from the year before.
Crude-oil prices are hovering near $75 a barrel, and analysts do not foresee a sharp drop anytime soon given the world’s rising appetite for fuel and supply threats that pump fear into the market.
Other oil companies reported big numbers for the quarter this week as well. BP PLC reported its quarterly profit rose 30 percent to $7.3 billion and ConocoPhillips said its earnings rose 65 percent to $5.18 billion. Chevron Corp. will round the field of five majors when it reports its second-quarter performance Friday.
These five were expected to earn an estimated $33.6 billion, or a 32 percent boost, according to analysts surveyed by Thomson Financial. Already the first four have reported earning $30.16 billion.
Exxon is the world’s largest publicly traded oil company.
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NEW YORK (AP) ? Merrill Lynch & Co. Inc., best known for its retail brokerage network, has also become a powerful player as an investment banker for companies looking to buy other firms or sell parts of their operations. This week, the firm took on a new and potentially troubling role in the massive buyout of hospital chain HCA Inc.
Besides being the HCA’s long-term adviser, Merrill also was one of the principal investors in a consortium that bid $21.3 billion to take over the Nashville-based company. It also advised that group on the deal and how to finance it.
That involvement showcased Merrill’s initiative to build its private-equity business, something that it plans to grow by tapping its existing business connections.
“Our growing force of investment bankers is increasing its focus on sourcing scale opportunities, where we often find ourselves investing alongside our clients,” Merrill’s chief financial officer Jeff Edwards said during a conference call with analysts and investors last week, according to a transcript provided by Thomson Financial’s StreetEvents.
So far, the strategy is paying off: Earnings in its private-equity segment nearly tripled in the second quarter from the year before. While Merrill declined to give specifics, a report from Sandler O’Neill Partners put that figure in excess of $700 million in revenues, and estimated that such gains contributed 19 cents a share to Merrill’s per-share net of $1.63.
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(AP) ? Wal-Mart Stores Inc. is ending its loss-generating business in Germany just two months after leaving South Korea in what analysts welcomed as a move to focus resources on expanding in more profitable international markets like China and Latin America.
Wal-Mart said Friday it plans to sell its 85 stores in Germany to rival Metro AG, ending a nearly decade-long effort by the world’s largest retailer to crack the market in Europe’s biggest economy.
Terms were not disclosed, but the Bentonville, Ark.-based retailer said it expects to incur a loss before taxes of about $1 billion related to the deal in its second quarter.
Wal-Mart has said over the years that its German operations were not profitable.
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NEW YORK (AP) ? A federal appeals court on Friday upheld the conviction of former WorldCom Inc. Chief Executive Bernard Ebbers on charges related to a multibillion dollar accounting fraud.
The ruling by the three-judge panel of the 2nd U.S. Circuit Court of Appeals could clear the way for Ebbers to begin serving a 25-year prison sentence for his actions as head of the telecommunications company. Convicted in 2005, Ebbers had argued on appeal that he had been denied a fair trial and that his lengthy prison sentence was unreasonable.