With the markets bang in the middle of earnings season, it should be easy to find a company that – pre market at least – looks set to outperform its peers on Wednesday. However, the majority of the high profile (and most of the lesser known) companies have missed on their quarter one earnings today. Here is one that didn’t and one that did.
Royal Dutch Shell Plc (RDS-A)
First up is Royal Dutch Shell. Many reading this will be well aware of the company and its operations, but for those that aren’t, Royal Dutch Shell operates as an independent oil and gas company that explores for, and extracts, crude oil, natural gas, and natural gas liquids worldwide. The company has had something of a unsettled couple of months, with a large portion of its annual operational expenditure going to Russia. The ongoing tension between Russia and Ukraine (alongside the sanctions incurred) have led to uncertainty over oil and gas companies like Royal Dutch Shell’s involvement in the region. However, the company has today announced that it will not be entering any new investments in Russia, which should settle speculation somewhat.
Looking specifically at the day’s earnings release, first quarter profits fell 3% to $7.3B, but came in far ahead of expectations, with consensus averaging approximately $5B. The company’s stock is up 5.4% pre market, up at 79.89 from from yesterday’s close at 76.51. The rally offers up potential upside targets of 2008-2009 highs between 80.00-86.00.
Barrick Gold Corporation (ABX)
Next up is mining giant Barrick Gold. Something of a long term play this one, Barrick reported its quarter one earnings pre market on Wednesday. The report missed expectations across the headline figures, which will likely translate to a short term pullback as Wednesday matures. The longer term outlook for the company (as dictated by current conditions leading to a supply contraction) is bullish, so any pullbacks will likely offer up an opportunity to enter at a discount.
To contact the reporter of this story: Samuel Rae at Samuel@forexminute.com