Apple and Exxon may not be so different, after all
By Christopher Swann and Robert Cyran
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
Apple and Exxon Mobil may not be so different, after all. The two seemingly disparate companies share more than nearly identical U.S. market-leading values of about $400 billion. Both are threatened by shrinking margins and the struggle to replace their precious wares. Exxon in various iterations has survived four times longer than Apple, but is just as vulnerable.
2012 may be as good as it gets for Exxon
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
2012 may be as good as it gets for Exxon Mobil. America’s largest oil company pumped out a near-record profit and its best earnings per share ever. But Exxon, like Chevron, is spending huge sums – almost $40 billion last year – to find and extract reserves. Holding output steady is tough enough. Unless oil prices jump, Exxon may have peaked.
Activist exposes Hess as latest governance villain
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
An activist investor has exposed Hess as the latest governance villain in the energy patch. Hedge fund Elliott Associates reckons the U.S. oil company could be worth more than double its current $20 billion-plus value. But as at other energy groups, like Chesapeake Energy and SandRidge Energy, a too-cozy board has brought waste and strategic blunders.
Boeing flagship glitches look like mere turbulence
By Christopher Swann
NEW YORK (Reuters Breakingviews) – The grounding of two Japanese airlines’ Dreamliner fleets is a warning. Boeing (BA.N: Quote, Profile, Research) needs to fix the glitches to ensure a smooth future for the much ballyhooed and delayed 787. But the problems aren’t looking any bigger than the Airbus (EAD.PA: Quote, Profile, Research) A380′s teething troubles. Investors’ mild reaction – a 4 percent drop in the stock, knocking market value down by about $2 billion – seems right.
Boeing’s new flagship, which ran years behind schedule and far over budget in development, was intended to corner the global point-to-point market – delivering passengers to their final destination rather than just flying them between major hubs like New York or London. So far Boeing has orders for slightly fewer than 900 aircraft and needs to sell at least 1,100 to start making a profit on the Dreamliner, according to Morningstar.
Oil barons and tech hipsters share a dark side
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Oil barons and technology hipsters seem very different. But they share a dark side. The chief executive of U.S. explorer SandRidge Energy and some of his peers jet around at shareholders’ expense, while at Facebook and Google founder-bosses are insulated from owners by super-voting rights. Clubby boards also feature in both sectors.
Coal’s ascendancy to leave ailing U.S. miners in pit
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Coal’s ascendancy looks set to leave already ailing U.S. miners stuck in a pit. Within five years, the black rock is likely to replace oil as the world’s top energy source, according to the International Energy Agency. That should be good news for America’s miners, which are sitting on 28 percent of the planet’s coal. But they’re ill placed to do well from the boom.
Freeport deal triangle gets cozier and cozier
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Freeport-McMoRan Copper & Gold’s foray into energy keeps getting cozier for the top executives involved. The U.S. mining group’s market value has plunged $6 billion following news of its planned purchase of Plains Exploration & Production and McMoRan Exploration. Yet Jim Bob Moffett, Freeport’s chairman, and James Flores, chief executive of Plains, will come out ahead.
SandRidge CEO sets bar even lower for oil patch
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Tom Ward, chief executive of troubled oil and gas explorer SandRidge Energy, has set the bar even lower for the oil patch. He is not the first energy boss to live large at shareholders’ expense. But his extravagance at the nearly $3 billion U.S. company would make even TV villain J.R. Ewing blush. Angry owners are right to want him out.
U.S. energy boom spurs economic vs political clash
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
America’s energy boom is spurring a clash between the realms of politics and economics. Meaningful exports of oil have been banned for almost a century. But with output surging and crude fetching a 20 percent discount at home, producers want to ship it overseas. BP, Royal Dutch Shell and four others have applied for limited licenses to do just that. Unblocking trade could benefit everyone.
IMF’s long-term worry: decades of higher rates
By Christopher Swann and Martin Hutchinson
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
The International Monetary Fund has a new long-term worry: decades of higher interest rates. Don’t get too comfortable with low borrowing costs, is the downbeat message from the normally overoptimistic fund’s flagship World Economic Outlook. Slightly feebler growth of 3.3 percent for 2012 is the short-term concern. But past fiscal excesses and an ageing population could push up interest rates for a generation.
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