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For Immediate Release
Chicago, IL – March 2, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include ExxonMobil Corporation ( (XOM - Analyst Report), Total SA ( (TOT - Analyst Report), Chevron Corporation ( (CVX - Analyst Report), Nexen Inc. ( and Becton, Dickinson and Company ( (BDX - Analyst Report).
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Here are highlights from Thursday’s Analyst Blog:
Exxon’s Usan Commences Production
ExxonMobil Corporation ( (XOM - Analyst Report), through its Nigerian affiliate − ExxonMobil subsidiary Esso E&P Nigeria (Offshore East) Limited − experienced the first oil from the Usan field off the coast of West Africa. This is expected to boost Nigeria’s daily oil production capacity by 180,000 barrels at peak level. Nigeria is considered to be Organization of the Petroleum Exporting Countries’ (OPEC) fourth largest oil producer.
The Usan project is a joint deepwater offshore development venture in Nigeria aiming to develop the country’s resources. The oil field is expected to have a reserve potential of more than 500 million barrels of oil. The project will employ a floating production, storage and offloading (FPSO) vessel with a storage capacity of two million barrels of oil. The vessel is designed to process 180,000 barrels per day and its size (320 meters long and 61 meters wide) makes it one of the biggest vessels of its kind in the world.
Discovered in 2002, Usan lies in water depths ranging between 750 meter and 800 meter in Oil Mining Lease (OML) 138 and approximately 62 miles (about 100 kilometers) off Nigeria’s coast, south east of Port Harcourt, Rivers State. French oil major, Total SA ( (TOT - Analyst Report) enjoys the operatorship of the project with a 20% interest through its subsidiary −Total E&P Nigeria Limited. Other partners include the Nigerian subsidiaries of ExxonMobil with 30% interest, Chevron Corporation ( (CVX - Analyst Report) with 30% share and Nexen Inc. ( with 20%.
ExxonMobil remains upbeat in both shallow water shelf as well as deepwater acreage offshore Nigeria where it holds interest in seven blocks. In the deepwater, the company also holds the operational interest in Erha and Erha North fields and generates volumes from the Bonga field. ExxonMobil’s net production averaged 391 thousand barrels per day in offshore Nigeria as of 2010.
The company boasts of diversified operations across the world with several new projects coming online through 2013. While Exxon functions in all corners of the globe, the main areas of focus, for new volumes, in the coming years include the U.S., Canada, Kazakhstan, Nigeria, Australia, Russia, Angola and Iraq. In the exploration front, it includes unconventional natural gas across North America as well as offshore regions, including the Gulf of Mexico. Hence, we believe that the super major will retain its leverage to higher oil prices going forward given its significant share in the upstream business.
However, we remain skeptical following the company’s fourth-quarter 2011 production level, which declined almost 9% year over year. Hence, we maintain our long-term Neutral recommendation on the company. ExxonMobil holds a Zacks #3 Rank, which translates into a short-term Hold rating.
Earnings Scorecard: Becton, Dickinson
Estimates for Becton, Dickinson and Company ( (BDX - Analyst Report) are on a downswing following the first-quarter fiscal 2012 results, which appears to reflect its lower year-over-year earnings in the quarter due to higher raw material prices, tough pricing comparisons and rising expenditures for recent acquisitions.
The Results in Brief
Net income (as reported) for the first quarter dropped 16.8% year over year to roughly $263 million (or $1.21 a share). Becton Dickinson recorded revenues of $1,888 million in the reported quarter, up 2.5% (or 2.4% in constant currency) year over year.
Domestic sales for the quarter were $829 million, flat year over year. Ex-U.S. revenues were $1,059 million, up 4.5% (or 4.4% in constant currency). International sales were driven by sustained growth in emerging nations and robust safety sales.
We have discussed the quarterly results at length here: Becton Beats, Profit Drops
Agreement – Estimate Revisions
The overall trend in estimate revisions for fiscal 2012 is overwhelmingly negative following the release of the first quarter results. Out of 17 analysts covering the stock, 15 have lowered their estimates over the past month with no case of upward revision. There was only one estimate revision, in the upward direction, over the past 7 days.
A similar trend was seen for fiscal 2012 with 12 analysts (out of 17) lowering their forecast over the last 30 days with only two upward revisions. There was just a solitary positive revision, over the past 7 days, with no reverse movement.
Besides the year over year decline in earnings in the reported quarter, the bearish analyst sentiment also appears to reflect the company’s guidance revision. Becton Dickinson lowered its diluted earnings per share (from continuing operations) guidance for fiscal 2012 to a lower range of $5.60 to $5.70 (earlier $5.75 to $5.85), factoring in a stronger dollar.
Magnitude – Consensus Estimate Trend
A predominantly downward directional movement has led to a decrease in the annual forecast for Becton Dickinson. Estimates for fiscal 2012 and 2013 have gone down by 12 cents and 18 cents, respectively, over the last 30 days. The magnitude of revisions reached a plateau over the past week, in both cases. The current Zacks Consensus Estimate for 2012 is $5.67, reflecting an estimated 0.9% year-over-year growth.
Becton Dickinson Stays at Neutral
We remain cautious about Becton Dickinson due to the lack of major short-term catalysts. The rising demand for safety-needle products (with higher price points and margins) was the primary driver of the company’s past growth, which is not expected to continue, given that the U.S. market is already largely penetrated.
On the positive side, Becton Dickinson’s preeminent global healthcare products franchise is partly insulated from volatile macroeconomic conditions and structural deficiencies elsewhere in the healthcare delivery field.
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