Updates from BP, GKN and Weir Group
Filed under: Investing
The FTSE 100 climbed on more confidence hopes yesterday, rising +1.18% overall. European markets saw similar gains, but not the Dow Jones, which slipped slightly (-0.02%) on central bank meeting nerves.
Overnight in Asia, a rash of encouraging corporate earnings saw the Japanese Nikkei climb +0.7% while Hong Kong's Hang Seng index rose +0.9%.
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We commence with one of the FTSE's bigger beasts - BP - and a tumble in profits. BP says second half year profits have slumped after it slashed the value of much of its US shale gas assets. It was also hit by 'replacement cost profit' costs, stripping out changes to the company's inventory due to changing oil prices.
The company saw a net loss of $1.4 billion compared with $5.6 billion in profits the same time a year ago. Omitting its Russian TNK-BP adventure, production slipped 8% to 2.3 million barrels of oil equivalent a day.
"The effects of price movements have impacted our earnings in the quarter,'' said chief exec Bob Dudley in a stock exchange announcement. "Our extensive turnaround and maintenance programme, which will continue into the third quarter, is also affecting some aspects of our near term results.''
Next, engineering parts maker GKN. First half profits have climbed by around 33% it said in stock exchange statement this morning. Much of the uplift is attributed to better luxury car sales. Pre-tax profits climbed to £266m for the first six months of 2012.
Additionally operating profit climbed 19% to £293 million while its trading margin improved to 8.5%, GKN claims. Earnings per share climb 22% to 14.4 pence per share, however net debt is up to £590 million (31 December 2011: £538 million).
"GKN has continued to make good progress both in terms of financial performance and implementing our strategy to build a global market-leading business," said chief exec Nigel Stein. "First half trading has seen sales increases and margin progression for each of our four Divisions and our new acquisitions, Stromag and Getrag Driveline Products, are performing well."
Finally, another engineering player - Weir Group. The pump maker says pretax profit from continuing operations climbed 22% to £203m (2011: £167m) for the first half of 2012 while earnings per share from continuing operations climbed 27% to 76.4p (2011: 60.1p).
There remains strong trading in the Minerals and Power & Industrial divisions with a strengthening aftermarket performance - inputs are up 17%, and revenue 29% up says Weir. H1 upstream revenue and margin expectations are met says the company, but there is "challenging" H2 pressure on the pumping markets.
"In the second half," said chief exec Keith Cochrane, "we anticipate a strong performance from the Minerals and Power & Industrial Divisions and some improvement in Oil & Gas upstream pressure pumping aftermarket demand relative to the second quarter, although the timing of any improvement remains uncertain."