Still unsure of what to think in the wake of a plunging U.S. dollar and a jobs report on Friday that could make or break the market, the S&P 500 ended a very choppy session at 1915.44, up 0.15%.
It could have been worse, though. How? You could have owned ConocoPhillips (NYSE:COP), AstraZeneca plc (NYSE:AZN) or Metlife Inc (NYSE:MET), each of which dished out sizable losses. Here’s the deal.
ConocoPhillips (COP)
In light of the news Marathon Petroleum Corp (NYSE:MPC) and its MLP entity MPLX LP (NYSE:MPLX) laid on us yesterday, today’s news from ConocoPhillips shouldn’t be terribly surprising. Yet, the fact that COP shares were off more than 8% on Thursday does indeed say traders were surprised.
The early warning that MPLX and its general partner Marathon Petroleum unveiled was a drastic cut in its forecasted distributions for MPLX this year. The new payout rate is expected to range from 12%-15%, versus a targeted rate of twice that just a few months ago when the MLP was taking shape, pointing to a bigger problem all oil companies are facing now… too-cheap crude.
ConocoPhillips followed suit today, telling investors it, too, would be cutting its dividend to COP shareholders after reporting disappointing fourth-quarter results. The dividend payable at the end of March, which at one time was expected to be 74 cents, will instead be 25 cents, as the company works to prepare for the unknown by preserving as much cash as possible.
Metlife Inc (MET)
The exceedingly strong U.S. dollar has found another victim… Metlife shareholders. That’s what the company says, anyway. MET fell almost 6% on Thursday after Wednesday evening’s fourth-quarter report was posted.
All told, the insurer earned a total of $1.4 billion last quarter, down 13% from the year-ago bottom line, though even on a constant-currency basis income was lower to the tune of 10%. Either way, the operating profit of $1.23 per share missed expectations for earnings of $1.36 per share of MET.
The company’s investments in hedge funds turned particularly sour. Net income that had normally ranged anywhere from $300 million to $450 million per quarter from these holdings only contributed $109 million during the fourth quarter of last year.
Nevertheless, Metlife plans to continue holding stakes in the alternative investments.
AstraZeneca plc (AZN)
Last but not least, while the phrase “patent cliff” isn’t being battered around as feverishly as it was a couple of years ago, make no mistake — pharmaceutical companies are still falling off of it.
Case in point: AstraZeneca plc. This morning, the UK-based drug maker warned AZN shareholders this year’s bottom line will fall modestly from last year’s total now that its cholesterol drug, Crestor, would be losing its U.S. patent protection in May. It’s a big loss for the $76.5 billion company; Crestor generated $6.6 billion worth of sales in 2014.
Fanning the bearish flames were weak showings from drugs Brilinta, Onglyza, and Bydureon. Though none are as big as Crestor, collectively they make a dent. None of them sold as well as analysts expected.
AZN finished the day down almost 6%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
