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Wednesday's Energy Stocks: Large utilities drag sector, Wall Street rises

Broader markets maintained their winning streak Wednesday, Feb. 14, after the Department of Labor released its latest data. According to the report, the consumer price index rose 2.1% on an annual basis in January for the second month in a row, while core inflation, excluding food and energy, was up 1.8%, the same as in December.

The Dow Jones Industrial Average added 1.03% to finish at 24,893.49, while the S&P 500 settled the day 1.34% higher at 2,698.63. Meanwhile, losses among large diversified utilities dragged the SNL Energy Index to the negative side of the ledger, declining 0.44% to 272.71.

Following the release of its 2017 fourth-quarter earnings, CMS Energy Corp. dropped 0.35% on heavy volume to end at $42.90. The company posted adjusted net income of $145 million, or 51 cents per share, climbing from $81 million, or 29 cents per share, in the comparable quarter of 2016. The result was in line with the S&P Capital IQ consensus normalized EPS estimate for the most recent quarter of 51 cents.

Management said on an earnings conference call that the lower rate revenues brought on by a new federal tax reform law could leave room in future years for incremental capital expenditures.

Among other large diversified utilities, Southern Co. lost 2.29% to close at $43.60, Duke Energy Corp. retreated 2.09% to finish at $75.47, and Xcel Energy Inc. declined 1.68% to settle at $43.22, all on strong volume.

Among exploration and production companies, Antero Resources Corp. closed up 5.00% in brisk trading to $18.27 after reporting total adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses of $437.1 million in the fourth quarter of 2017, down from $475.9 million in the year-ago quarter. Executives said during an earnings call that the company will stick to a strategy of drilling long laterals and focused capital spending to achieve its production targets and deliver $1.6 billion in free cash flow through 2022.

Occidental Petroleum Corp. shares rose 0.19% on strong volume to finish at $69.85 after recording $313 million, or 41 cents per share, of core income for the fourth quarter of 2017, compared to a loss of $97 million, or 13 cents per share, in the prior-year period.

During the fourth quarter of 2017, Occidental's total production rose 7% on the year to 621,000 barrels of oil equivalent per day, which was below the company's and analysts' expectations, as downtime and the weather impacted volumes. The company intends to complete its $50.00/bbl breakeven plan ahead of schedule by the third quarter.

Exxon Mobil Corp. will sell its 50% stake in the Scarborough gas field offshore Western Australia to exploration and production company Woodside Petroleum Ltd. for $744 million. Exxon Mobil was up 0.21% on brisk volume to finish at $76.46.

Shares of Phillips 66 dipped 0.46% in active trading to settle at $93.33 after agreeing to repurchase $3.3 billion of its common shares from a subsidiary of Berkshire Hathaway Inc. Phillips 66 will buy back 35 million shares at $93.725 per share.

Tax reform is boosting the bottom lines of the U.S. coal sector.

Among the lead performers for the day, Arch Coal Inc. climbed 3.25% to $93.06, Peabody Energy Corp. gained 3.53% to $41.35, and CNX Resources Corporation added 9.15% to $14.56, all in robust trading.

Natural gas futures for March seesawed through the Wednesday trading session, searching for direction ahead of what is expected to be a supportive storage withdrawal report out Thursday from the U.S. Energy Information Administration, but with varied weather outlooks. Spanning $2.553/MMBtu to $2.623/MMBtu, the contract ended the midweek session 0.7 cent lower at $2.587/MMBtu.

Market prices and index values are current as of the time of publication and are subject to change.