BP’s shale bet pays off; Disney earnings; Google beats forecasts

Posted at 3:16 AM, Feb 05, 2019
and last updated 2019-02-05 05:16:41-05

1. Strong BP: Shares in BP jumped 3.7% in London after the company wowed investors with its results for 2018.

BP went big on US shale last year, buying major oil assets from mining firm BHP for $10.5 billion. The investment paid off: profits in 2018 more than doubled over the previous year to $12.7 billion.

BP also said its oil and gas output soared to 3.7 million barrels a day, an 8.2% increase from 2017.

The US shale boom is lifting the oil and gas sector. Shell and Exxon Mobil also topped analyst expectations in recent weeks.

2. Media earnings: Disney is set to report earnings after the closing bell. Analysts expect the entertainment giant to reveal a small decline in revenues for the first quarter of its fiscal year.

This will be a big year for Disney. It’s on track to complete its purchase of most of Fox before June, and the company is also getting ready for the launch of its new streaming service, Disney+.

21st Century Fox will report earnings on Wednesday.

3. Google results: Alphabet, the parent company of Google, reported $39.3 billion in revenue for the final three months of 2018, an increase of 22% from the same period a year earlier.

The growth was fueled in large part by Google’s advertising business. But the company also said it is now paying more to support its advertising business.

Alphabet said its traffic and acquisition cost — the money it pays to companies to run its ads and services — was $7.4 billion during the quarter, up from $6.5 billion a year ago. Its operating margin declined to 21%.

4. Global market overview: US stock futures were pointing higher.

European markets opened with gains. Asia had a quiet day with markets in mainland China, Hong Kong and South Korea closed for holidays. Stocks in India and Japan traded higher.

The Dow Jones industrial average and the S&P 500 closed 0.7% higher on Monday. The Nasdaq jumped 1.2%.

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5. Companies and earnings: Estee Lauder, Ralph Lauren and Viacom will release earnings before the open.

Electronic Arts, Plantronics and Snap will follow after the close.

Slack said Monday that it has filed confidential paperwork to go public. The company has so far raised about $1.2 billion from investors including SoftBank and Accel. In August, Slack was valued at $7.1 billion.

Media reports suggest that Anheuser-Busch InBev is considering an IPO for its Asia business. According to the Wall Street Journal, the listing could happen in Hong Kong.

The company said in a statement that it is “committed to our businesses in the Asia Pacific region and excited about the potential in this geography.”

6. Coming this week:
Tuesday — US State of the Union address; Disney, Snap and Electronic Arts earnings
Wednesday — GM, Chipotle, Toyota, Humana, Eli Lilly, The New York Times and Spotify earnings; the Cayman Alternative Investment Summit begins
Thursday — Twitter, Yum! Brands, Kellogg, Philip Morris International, MetLife, Mattel, T-Mobile, News Corp and Dunkin Brands earnings
Friday — Hasbro, Phillips 66 earnings