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Science & Technology

GE to Buy Lufkin Industries for $3.1B in Bid to Expand Energy Business

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By The Associated Press

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Allison Joyce/Getty Images Jeff Immelt, chairman and CEO of General Electric, speaks at an NFL news conference on March 11 in New York.

By JONATHAN FAHEY

NEW YORK — GE has agreed to buy the oilfield equipment maker Lufkin Industries for $3.1 billion, furthering an effort by GE to grow its oil and gas operations.

General Electric Co. (GE) said Monday that it would pay Lufkin shareholders $88.50 a share, a 38 percent premium over Lufkin’s closing price on Friday of $63.93.

The companies valued the deal at $3.3 billion, which includes $200 million in debt to be assumed by GE.

CEO Jeff Immelt is in the process of transforming GE from a sprawling conglomerate to one that is more tightly focused on providing services and equipment to industrial customers. The company has shed divisions such as NBC Universal and is shrinking its banking operations.

At the same time, Immelt indicated the company would use some of its enormous cash balance to buy mid-sized companies that fit well into what the company already does. GE makes aircraft engines, natural gas-fired turbines and generators, wind turbines, medical devices and locomotives.

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General Electric is putting particular focus on oil and gas, hoping to capitalize on the boom in extracting oil from difficult places, such as deep offshore, shale formations under several U.S. states, or older depleting oil fields. GE bought Wellstream, a maker of flexible pipes for gathering oil undersea, in 2010, and a division of the John Wood Group, a maker of pumps and control systems, in 2011.

“Wells in the future are going to be more and more technically challenging,” said Dan Heintzelman, who runs GE‘s oil and gas division, in an interview Monday.

Lufkin Industries Inc. (LUFK), based in Lufkin, Texas, makes pumping equipment that helps drillers extract more oil out of older fields or ones that need to be pumped because the oil and gas underground is not under enough pressure to be forced to the surface naturally. Heintzelman said 94 percent of wells will require some form of pumping, known in the industry as artificial lift.

GE‘s oil and gas related revenue has tripled since 2005, to $15 billion, accounting for 10 percent of the company’s $147 billion total revenue last year.

Christopher Glynn, an analyst at Oppenheimer, said the deal fits nicely into GE‘s strategy. He said as oil and gas continues to get more expensive to produce there will be ample opportunity for GE‘s growing oil and gas division to offer products and services to help keep those costs in check and make fields more productive.

Lufkin shares climbed $23.94, or 37.5 percent, to $87.87 in premarket trading. GE shares edged up 13 cents to $23.06 about 45 minutes ahead of …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 FTSE Dividends Lifted This Week

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By Alan Oscroft, The Motley Fool

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LONDON — The FTSE 100 has been having a good week so far, gaining 53 points by the close of play on Tuesday to set a new 52-week record of 6,432. As of 8:30 a.m. EST today, the index was continuing its climb to reach 6,458. Despite miners dragging the index down on Monday, economic indicators are generally sounding good, and we’ve had a number of strong company results.

But how do those companies’ dividends compare to the FTSE‘s average of about 3%? Here are three that have lifted them this week.

Intertek
Intertek Group boosted its full-year dividend by 22% to 41 pence per share on Monday when the safety expert and operator of product-testing labs released full-year results. The dividend has almost doubled in four years since 2008’s 20.8 pence per share, while earnings have also almost doubled from 67.8 pence per share in 2008 to 133.1 pence this time. And we have more of the same forecast for 2013, with a further 16% hike to the dividend expected.

The 2012 dividend only amounts to a yield of 1.2% based on the current share price of 3,434 pence, but that’s because the share price has appreciated so much in the past few years. From December 2008, when that year’s yield was 2.7%, the share price has more than quadrupled.

Amlin
Specialist insurer Amlin also lifted its 2012 full-year dividend on Monday, by 4.3% to 24 pence per share. That’s not a massive annual increase, but it represents a yield of 5.7% on a share price of 424 pence — and it was more than twice covered by earnings.

As with many insurers, Amlin’s earnings have been erratic, but the dividend has been steady right through the economic crisis — and steady is what most income investors want. With earnings expected to be down a bit in 2013 and back up again in 2014, analysts are forecasting rises in the dividend of around 5% per year for the next two years.

John Wood
Tuesday brought us results from oil services engineer John Wood Group, and with them came a 26% rise in the firm’s full-year dividend to $0.17 per share. On a price of 824 pence per share, that’s a yield of only about 1.4%, but it was more than four times covered, and it adds a little extra to an almost quadrupling of the share price from the dark days of 2009.

Current forecasts suggest a 30% rise in earnings for 2013 and a 14% boost to the dividend, with a further rise for 2014 taking the dividend yield up to 2%.

Dividend rises like these three are always welcome, and companies that manage steady payouts form the cornerstones of many a portfolio. Whether you’re investing for income or growth, good old cash is always welcome. And that’s why I recommend the brand-new Fool report “The Motley Fool’s Top Income Share For 2013,” in …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

John Wood Group Powers Forward

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By Stuart Watson, The Motley Fool

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LONDON — John Wood Group saw its shares rise 7.2% to 812 pence this morning following a well-received set of results.

Wood Group is an engineering business focused on the energy sector, and it is still seeing activity bounce back a little from the financial crisis. Its sales rose by 20% to $6.8 billion in 2012, but underlying profit growth was much higher at 43%.

All three of the company’s divisions saw growth last year, but the largest increase came from Wood Group Engineering, which provides services to the upstream, subsea and pipelines, downstream and industrial, and clean-energy sectors. This division’s profit margins are twice those of the other two parts of the business, so this helped Wood Group‘s overall profit margin rise from 6% to 6.8%.

The annual dividend was raised by 26% to $0.17 per share, though Wood Group currently pays less than a quarter of its profit out to shareholders. Net debt rose from $4 million last year to $155 million, mostly due to spending on acquisitions.

Wood Group has reshuffled its management team in the past year, with Sir Ian Wood departing as chairman and the previous CEO, Allister Langlands, taking his place. The current CEO, Bob Keiller, was previously head of Wood Group‘s PSN division.

This company is certainly benefiting from industry tailwinds at the moment. It reckons global spending on oil exploration and production rose 9% last year, and a further 7% increase is expected in 2013. Shale gas production in the U.S. is a key driver, as is the increased complexity of finding and developing new oil fields.

Looking ahead, Wood Group is valued at about 13 times forecast profit for this year, although these figures may be revised after these latest results. At 3 billion pounds, Wood Group is one of the smaller companies in the FTSE 100 right now, but it looks set to progress in the years ahead.

If you’re looking for more growth share ideas, then we have a special free report you can download right now. In it, we identify one of our favorite growth stories of 2013. We also have another free report looking at the many opportunities in the oil and gas sector. Don’t miss “How To Unearth Great Oil and Gas Shares.”

The article John Wood Group Powers Forward originally appeared on Fool.com.

Stuart does not own shares in Wood Group.
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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 Shares Set to Beat the FTSE 100 Today

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By Alan Oscroft, The Motley Fool

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LONDON — The FTSE 100 is making an impressive showing, up 1.1% to 6,417 points as of 9:15 a.m. EST. A number of positive company reports helped the markets, while noises from the U.S. and China again expressed commitment to economic stimulus and growth.

But even with the FTSE up, there are individual shares beating it. Here are three.

John Wood
Full-year results sent John Wood Group shares up 7.6% to 815 pence today after the engineer reported a 20% rise in sales to $6.8 billion for the year ended December 2012. That led to a 42% increase in adjusted earnings per share to $0.85 cents, enabling the total dividend to be boosted by 26% to $0.14 cents per share.

And there’s more of the same forecast, with the current analysts’ consensus suggesting 30% growth in earnings for 2013 and a further 16% for the year after. That puts the shares on a forward price-to-earnings ratio of 12 for this year, falling to 10.5 next. Dividends are still low, mind, with respective yields of 1.7% and 2% expected for the next two years.

Xstrata
Full-year results and an update on the merger between Xstrata and Glencore saw both shares rise in price today. As I write, Xstrata is up 5.6% to 1,161 pence, while Glencore is up 4.8% to 388 pence.

With commodities prices falling, Xstrata saw a 7% fall in revenue to $31.6 billion, with EBITDA down 30% to $8.1 billion and pre-exceptional earnings per share down 37% to $1.24. Glencore saw revenue rise by 15% to $214 billion, though EBITDA fell 8% to $5.9 billion and pre-exceptional EPS fell 39% to $0.44. The longstop date for the firms’ merger has been extended to April 16.

Serco
Serco Group shares have soared by 7.9% to 625 pence after the services and outsourcing company announced a 5.7% rise in revenue to 4.9 billion pounds for the year to December 2012. Adjusted pre-tax profit rose by 6.1% to 278 million pounds, with adjusted earnings per share up 7.5% to 43 pence. The firm raised its dividend by 20% to 10.1 pence per share for a modest yield of 1.6%.

Years of earnings growth are forecast to continue for the next two years, with 2% expected this year and 11% next, putting the shares on a forward P/E of 13 for 2013, dropping to 12 the year after.

Coming out of a recession when depressed share prices are rising, the odds can be tipped in favor of growth investors. But finding the best growth shares is not easy. If you want some help with the task, I recommend you get yourself a copy of our brand-new report “The Motley Fool’s Top Growth Share For 2013,” which is the result of some serious brain-work by the Fool’s top analysts. It’s completely free of charge, but it will be available for a limited period only. So click …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Dow to Open Within Reach of Record High

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By Roland Head, The Motley Fool

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LONDON — The Dow Jones Industrial Average closed at 14,127 yesterday, just 37 points short of its highest-ever close of 14,164, which was set in 2007. Stock index futures at 7 a.m. EST indicate that the Dow may open 0.21% higher this morning, leaving it within touching distance of a new closing record. The S&P 500 is also expected to open up by 0.21% today, although it remains well below its all-time high of 1,576.

Today’s main economic report will be February’s ISM nonmanufacturing index at 10 a.m. EST. The index is expected to remain unchanged at 55.2, suggesting that the U.S. service sector is continuing to recover strongly. Other data due for release this morning includes the ICSC-Goldman Sachs same-store sales index at 7:45 a.m. and the Johnson Redbook retail-sales index, due at 8.55am.

In corporate news, Smith & Wesson and VeriFone are both expected to report earnings after the markets close tonight, while companies due to report before markets open include Checkpoint Systems and H&E Equipment Services. Of more interest to many investors will be Apple, which is likely to be actively traded this morning after the tech giant’s shares closed at a 52-week low of $420.05 on Monday. Apple shares were flat in premarket trading, but shares in J. C. Penney fell a further 2% in early trading following news that a major shareholder had sold 10 million shares in the store at a price of $16.40, below yesterday’s closing price of $16.74.

European markets
The main European markets moved firmly higher this morning ahead of this week’s round of central bank monetary-policy committee meetings. Investors are betting that the Bank of England and the European Central Bank will show support for further monetary easing — reducing the risk of a market dip — following the latest eurozone data, which shows that the region is still firmly in recession.

The eurozone composite PMI, which indicates business activity across the 17-country single-currency zone, fell to 47.9 in February, down from 48.6 in January. Readings below 50 indicate contraction, although the result was ahead of forecasts.

At 7:10 a.m. EST, the DAX was up 1.65%, the CAC 40 was up 1.29%, the FTSE MIB was up 1.76%, and the IBEX 35 was up 1.28%. In London, the FTSE 100 was up 0.84%, led by public-sector outsourcing specialist Serco Group, which climbed 8.4% after announcing that its earnings per share rose by 40% during 2012, enabling the company to provide a 20% dividend increase for shareholders. Oil services firm John Wood Group was also a big riser, gaining 7.2% after its 2012 results were well received by investors.

If you’re looking for shares that can outperform the wider market, you need to look beyond the news headlines. This free Motley Fool report, “The Top Growth Share For 2013,” highlights a share that gained 38% in 2012, during which time the wider market rose just 6%. The company …read more
Source: FULL ARTICLE at DailyFinance