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NextEra Energy (NEE) Q4 2015 Results – Earnings Call Webcast

The following audio is from a conference call that will begin on January 28, 2016 at 09:00 AM ET. The audio will stream live while the call is active, and can be replayed upon its completion. If you would like to view a transcript of this call, please click here.

Cold Snap Warms Up Natural Gas ETFs

Natural gas prices were thwarted by sluggish trends with the energy market rout and a milder winter so far this year. Among the issues hurting the broader energy space, ample supplies and falling demand on global growth worries are primary. This, along with considerably warmer temperature in December (due to a protracted and stronger El Nino) played foul, taking natural gas futures to a 14-year low (read: No Winter Cheer for Natural Gas ETFs?). As a result, most of the exchange traded products tracking natural gas are in red this year defying seasonal strength. Normally, Arctic Chills give life to this commodity every winter. The cold snap boosts electricity demand across the region putting natural gas in focus. In fact, in 2014, the Polar Vortex caused natural gas prices to jump over 50%. Winter Storm Jonas to Rescue This year, the winter storm Jonas recently salvaged this besieged commodity. The whiteout struck on the East Coast, with icy temperatures and a snow emergency bolstering demand for natural gas for a valid reason. As almost 50% of Americans use natural gas for heating purposes, withdrawals in natural gas supplies push up the commodity’s prices. The U.S. Energy Information Administration also gave same cues on Thursday when it declared the largest weekly drawdown of gas from storage this winter, as per Wall Street Journal. Natural-gas prices went ‘above $5 per million British thermal units in parts of the Northeast for the first time since last winter’, as indicated by Wall Street Journal. If such sub-zero temperatures continue even after the snow storm, it will bring a great deal of luck for natural gas, albeit for the short term. ETF Impact In fact, an ETF tracking the natural gas futures – United States Natural Gas ETF (NYSEARCA: UNG ) -added about 0.13% on January 22. Investors should note that natural gas equities, such as First Trust ISE-Revere Natural Gas Index Fund (NYSEARCA: FCG ), were the real winner that added 5.2% on January 22. Below we highlight a couple of natural gas ETFs that investors could use to play if the U.S. economy remains snowed in the near term (see all Energy ETFs here). iPath Dow Jones-UBS Natural Gas ETN (NYSEARCA: GAZ ) This is an ETN option for natural gas investors. It delivers returns through an unleveraged investment in the natural gas futures contract plus the rate of interest on specified T-Bills. The product follows the Dow Jones-UBS Natural Gas Total Return Sub-Index. The note is less popular with AUM of $4.9 million. It is a high-cost choice, charging 75 bps in annual fees. GAZ is down 30.6% in the year-to-date frame and gained about 2% on January 22, 2016. FCG in Focus This product offers exposure to the U.S. stocks that derive a substantial portion of their revenues from the exploration and production of natural gas. It follows ISE-REVERE Natural Gas Index and holds 30 stocks in its basket, which are well spread out across components (read: 5 ETFs Losing Half or More of Their Value in 2015 ). Southwestern Energy Company, Antero Resources Corporation and Gulfport Energy Corporation occupy the top three positions in the portfolio with a combined 16% of total assets. This indicates that no single company dominates the fund’s returns, preventing heavy concentration. The fund has a blended style and is diversified across various market cap levels with 53% in small caps, 31% in mid caps and the rest in large caps. The product has amassed $132.7 million in its asset base while sees solid volume of nearly 2.5 million shares per day. It charges 60 bps in annual fees from investors and has a Zacks ETF Rank of 3 (Hold) with a High risk outlook. The fund is down 13.7% so far this year (as of January 22, 2016). Bottom Line Though there have been some incredible price increases lately in the natural gas market despite weak demand-supply fundamentals, the commodity is due for a price reversal. The weather will likely warm up across the country with the advent of spring and natural gas demand will trip up then. This is truer in the light of the fact that present stockpiles are pretty higher than the five-year average and the year-ago level. So, investors solely relying on a weather play might proceed with a short-term notion. Original Post

After Earnings, How Are Oil Service ETFs Shaping?

A lot is being said about oil for the last one-and-a-half years. Almost every day, the commodity is hitting headlines for all wrong reasons. The acute and persistent plunge in oil prices and no hope for immediate recovery is actually pushing down the global market. The worry has reached such a delirious stage that jittery investors are fervently keeping an eye on the earnings performance of the oil service companies before taking their call on any investment in energy stocks. After all, the investing world is busy figuring out whether oil has hit a bottom after a horrendous sell-off and is due to turn around soon, benefitting the broader energy sector. The Zacks Industry Rank for the said space is presently in the bottom 17%. Thanks to this outright bearish backdrop, the sector tops investors’ attention list this earnings season as everyone will be interested in the health of the oil companies. Let’s delve a little deeper into the earnings scenario and see how things are shaping up for the space. In this piece, we have considered two stocks, namely – Schlumberger Ltd. (NYSE: SLB ) and Halliburton Company (NYSE: HAL ) . Among the duo, Schlumberger reported earnings results on January 21 after the market closed while Halliburton reported on January 25 before the market opened. Results in Detail Halliburton – the second largest oil service company – came up with an earnings beat though revenues missed in Q4. Earnings of $0.31 per share from continuing operations beat the Zacks Consensus Estimate of $0.24. Improved stimulation works in Kuwait and Australia helped the company to beat on the bottom line despite rock-bottom oil prices. The bottom line fell considerably from fourth-quarter 2014 earnings of $1.19. However, Halliburton’s revenues of $5.08 billion reflected a 42.1% year-over-year improvement but a 0.3% miss the Zacks Consensus Estimate. Shares were down 4.1% in the two trading sessions following the declaration of results. Schlumberger – the world’s largest oilfield services provider – came up with a mixed Q4. Adjusted earnings of $0.65 per share (excluding special items) edged past the Zacks Consensus Estimate of $0.63 but fell from the year-ago number of $1.50. Continued decline in rig activity amid the oil price carnage was behind the year-over-year decline. Total revenue of $7.7 billion declined 38.9% year over year but was in line with the Zacks Consensus Estimate. SLB advanced more than 6% in the trading day following the results. Market Impact The space got mixed signals thanks to not-extremely-downbeat performances as many expected from these oil service giants. We would like to note that both companies currently have a Zacks Rank #5 (Sell), solely because of poor industry fundamentals. Still investors might want to know the impact on ETFs that are heavily invested in these popular oil service companies. Below, we have highlighted three oil-services ETFs with considerable allocation to SLB and HAL that could be in focus following oil-service earnings: iShares US Oil Equipment & Services ETF (NYSEARCA: IEZ ) This ETF – tracking the Dow Jones U.S. Select Oil Equipment & Services Index – invests about $195.7 million of assets in 41 securities, focusing solely on the energy world. In-focus SLB takes up the first position here with 19.41% of holdings. Generally, when one stock accounts for as much as 19% of an ETF’s weight, its individual performance decides much of the fund’s price movement. HAL takes up the second position with about 9.26% of total assets. The fund gained about 1.2% in the last three trading sessions (as of January 26, 2016) following the release of the earnings by the duo. IEZ charges 0.45% for its expense ratio. The fund has a Zacks ETF Rank #5 with a High risk outlook. Market Vectors Oil Services ETF (NYSEARCA: OIH ) OIH tracks the Market Vectors US Listed Oil Services 25 Index. The index invests $924.7 million of assets in 26 holdings. OIH devotes as much as 20.44% of the portfolio weight to SLB, followed by 11.66% in HAL. OIH is cheap in the space with an expense ratio of 0.35%. The fund returned about 0.9% in the last three trading sessions (as of January 26, 2016). OIH has a Zacks ETF Rank #5 with a High risk outlook. PowerShares Dynamic Oil & Gas Services Fund (NYSEARCA: PXJ ) This product offers exposure to 30 energy stocks with SLB and HAL at the second and fourth positions, respectively, allocating 5.5-6% of total assets to each. PXJ tracks the Dynamic Oil & Gas Services Intellidex Index and has amassed about $31.9 million thus far. The ETF charges 63 bps in fees, so it is a bit more expensive than some of its counterparts in the space. The fund has added about 0.1% following the earnings release of the two companies. PXJ has a Zacks ETF Rank #5 with a High risk outlook. Original Post