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WEC Energy reports higher first-quarter profits on strong demand for power
WEC Energy announced a 16.4% increase in its first-quarter profits on Tuesday, thanks to increased electricity consumption from residential, commercial and industrial customers. According to the U.S. Energy Information Administration, power consumption will reach new highs by 2025 and 26. This is due to AI, data centers, and residential and commercial consumers. WEC Energy’s natural gas deliveries to Wisconsin, excluding the natgas for power generation, increased by 15.5% during the first quarter. We Power and Wisconsin Public Service are the company's natural gas units. WEC Energy reported that residential power consumption increased by 5.5%, and retail sales rose by almost 3%. LSEG data shows that the company's operating revenue for the first quarter rose by 17.5%, to $3.15 Billion, compared to analysts' expectations of $2.82 Billion. WEC Energy's operating costs increased 18.5%, to $2.21 Billion. Interest expenses rose 16.1%. The company that provides electricity and natural gas to almost 4.7 million customers across Wisconsin, Illinois Michigan and Minnesota has reaffirmed their annual profit forecast. WEC Energy, based in Milwaukee, increased its net income to $724.2 millions, or $2.27 a share, during the first quarter of this year, up from $622.3, or $1.97 a share, one year ago. (Reporting and editing by Shounak dasgupta in Bengaluru)
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Constellation Energy's operating costs increase causes Constellation Energy to miss its first-quarter profit estimate
Constellation Energy, a U.S. utility, missed Wall Street's expectations for the first quarter profit on Tuesday. Higher operating and interest costs pushed its shares lower by nearly 5% during premarket trading. The net income of the company fell by around 87% compared to a year ago, and was $118 million for the quarter reported. The higher interest rates for longer can be a burden on utilities, as they make it more expensive to invest in critical infrastructure like electrical grids. Constellation Energy reported that interest expenses increased nearly 15% compared to a year ago, to $146 millions in the quarter January-March. Total operating expenses increased 18.5%, to $6.34 Billion. The company said that its $16.4 billion purchase of privately-held natural gas and geothermal company Calpine – a deal that was met with opposition from consumer groups – is on track to be finished by the end the year. Last month, the utility had explained to regulators its plan to acquire Calpine. According to LSEG, the Baltimore-based utility posted a profit adjusted of $2.14 for the three months ending March 31. This was below analysts' expectations of $2.22. (Reporting and editing by Krishna Chandra Eluri in Bengaluru, Katha Kalia, Sumit Saha)
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American Electric Power exceeds profit expectations, expects minimal tariff impacts
American Electric Power, which has benefited from increased demand from commercial clients, beat Wall Street expectations for its first-quarter profits on Tuesday. It also said that tariffs will have a minimal impact on the long-term plan of spending. Massive investments by Big Tech in artificial intelligence and infrastructure related to it have led to a surge of demand for electricity, which has encouraged energy producers' investments. AEP announced in February that it would increase its $54 billion capital plan to $10 billion due to the demand for data centres in the Midwest and Southern service areas of AEP. Bill Fehrman, CEO of GE Energy, said that capital investments were essential to improving reliability and customer service as well as meeting the new 20 gigawatts in power demand expected by the end decade. We have calculated that the direct tariff impact on our capital plan of $54 billion is very minimal, at around 0.3%. The U.S. Energy Information Administration said in April that the U.S. electricity consumption would reach new records in 2025 and 20,26. Demand for power will rise to 4,201 billion Kilowatt Hours (kWh) by this year. AEP reported that commercial load increased 12.3% during the quarter. Operating earnings for its vertically integrated utilities division were $349.9 millions, up from $300.3 million the year before. Transmission and Distribution utilities reported an operating profit of $192.3 millions, up from $150.3 million. AEP provides service to 5.6 million customers across 11 states, including Texas and Ohio. It has the largest transmission system of electric power in the U.S. The utility has reaffirmed their annual adjusted earnings per share forecast between $5.75 and $5.95. According to data compiled and analyzed by LSEG, the Colombus-based Ohio company reported an adjusted profit per share of $1.54 for the three-month period ended March 31. This was higher than analysts' estimates of $1.40.
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Sources say ADNOC is set to receive unconditional EU antitrust approval for Covestro.
Two people with direct knowledge said that the Abu Dhabi state oil company ADNOC will receive unconditional EU antitrust approval in its $16.6 billion acquisition of German chemicals firm Covestro for 14.7 billion euros. The largest deal ever signed by ADNOC demonstrates the Middle East's plans to diversify investments and reduce their dependence on oil as global energy transitions move towards cleaner sources of energy. According to the source, the European Commission is not concerned about competition because the companies are not overlapping. The EU Competition watchdog declined to comment. ADNOC could not be reached immediately for comment. The company expects the deal to close in the second half this year. Covestro, who earlier Tuesday reduced its core profit expectation for 2025, has said that it does not speculate on regulatory proceedings. "XRG and Covestro work constructively with the relevant authorities to file FSR, FDI, and merger control filings. The company stated in an email that it was confident all approvals would be received by the long-stop deadline (02.12.2025). XRG, the international investment arm within ADNOC, will be the majority shareholder of Covestro. Covestro manufactures plastics and chemicals used in the automotive, engineering, construction and construction sectors. The South African and Indian Competition Watchdogs have cleared the deal already without demanding any remedies. The EU Foreign Subsidies Regulation, FSR, also applies to this acquisition. It focuses on unfair foreign aid. The rules are designed to curb unfair competition by non-EU companies that receive government subsidies. ADNOC is still awaiting FSR approval for this deal. Last year, it received unconditional EU approval under the FSR to acquire Fertiglobe.
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Argentex's collapse on untested currency swings: from rebound to rescue
Argentex’s chief executive Jim Ormonde, and its chief financial officer Guy Rudolph bought shares of the London-listed forex broker in early April as the stock recovered from a March plunge. Ormonde was appointed 18 months ago amid a sagging stock performance. In a statement on April 2, Ormonde said that Argentex "reset" its 2024 goals and is now "well-positioned to return to profitable expansion." The company's shares have risen more than 50% in the past year. The company's liquidity position plummeted in a flash, and the financial markets reacted with a dramatic shift. Argentex became one of the most visible corporate victims in a matter of weeks as a result of the market volatility caused by the global war on trade. IFX Payments bought Argentex for a fraction of its value, and both the CEO and CFO are gone. Argentex declined comment. IFX, a UK-based company, did not respond to requests for comments. The 2nd of April was also known as "Liberation Day" when U.S. president Donald Trump announced sweeping tariffs in return against a number of countries. This triggered increased volatility among trading firms, with currency markets moving widely. The Swiss franc, the safe haven currency, surged by 7% against U.S. dollars in April. Meanwhile, Deutsche Bank's currencies volatilty index, which measures currency fluctuations, rose up to 28% and reached its highest level for two years. Argentex has navigated past big market crashes such as the decline of the pound against the dollar, Brexit and COVID-19. According to two people who are familiar with the firm, despite having done stress tests and scenario modelling, the company had not planned for the rapid devaluation of the dollar against many major currencies. The information they shared was confidential, so the company asked that their names not be used. One person said that Argentex is most vulnerable to sudden increases in the value of the Swiss franc, the euro, and the pound against the dollar. ZERO-ZERO LINES Argentex stated in its annual report for 2024 that it "performs regular stress tests to ensure the group is able to meet its current and future obligations if there were a significant change to the market." According to this person, Argentex, when the market moved in its favor, was exposed to cash calls by its liquidity providers. It also found itself unable to ask for margins from many of its customers due to its zero-zero line. Barclays and Citigroup declined to comment. They are two of Argentex's liquidity suppliers. According to an ex-forex broker, this business model is used by smaller FX brokers in London. It does not require the customer to pay initial margin or additional funds to cover intra-day volatility. Smaller brokers instead include margin costs into the price they charge for trading. The person stated that Argentex has paid out more than 20 million pounds (26.65 millions) in the 12 days following April 3. Argentex's full-year financial statements show that at the end December of last year, it had 18.4 millions pounds in cash. In its financial statements, the company stated that its cash flow position fluctuates significantly from month to month as a result of margin calls and working-capital movements. One Argentex employee, speaking under condition of anonymity as they were not authorized for public comment, said that "zero-zero contract aren't necessarily the devil." They said that the issue was "ensuring the business is healthy enough to accept those contracts". One of the two individuals said that the reasons for Argentex’s liquidity crisis were complex. It lacked a hefty financial balance sheet like its larger rivals, and was unable adequately to hedge its positions. The company was attempting to simplify its relationships with liquidity providers and implement a Treasury function to manage their positions when the markets were thrown into chaos by Trump's Tariffs. They also said that they were trying to boost its cash position through new products. In April, the company announced that it would launch its digital account and payment businesses this summer. Argentex, which was founded in 2012, received its authorization as an electronic-money institution (EMI) by the UK Financial Conduct Authority in 2018. According to Argentex's website, a quarter are from the financial industry. According to company filings from 2024, the family office of John Beckwith - one of Britain's richest financiers - backed the company in 2013. Beckwith's Pacific Investments Management held a 17% stake in the company before the deal was announced with IFX, according to LSEG. Pacific Investments refused to comment. EMIs have flooded London in the past decade. They offer payment services and enjoy a lower regulatory burden than banks. FCA regulations require EMIs keep counterparty and liquid risks in check, including the risk that a party may not fulfill its obligations. In a February letter to all CEOs and directors of payment firms, including EMIs (Electronic Money Institutions), the FCA stated that it was still concerned about risks for consumers and integrity of the financial system. The FCA gave EMIs a deadline of March 2025 for them to test their operational resilience in the event of a shock. When contacted for this article, the FCA declined comment. Argentex's other regulators in Australia, Dubai, and the Netherlands declined to comment on this matter or didn't respond to any requests for comments. FIELDING OF BIDS The company requested that trading be suspended on April 22. It revealed that its near-term liquidity was being affected by margin calls related to its foreign currency forward and options book after the rapid devaluation of the U.S. Dollar in response to U.S. Tariffs and Government Spending Cuts. The company announced that it would need "an immediate injection of cash to ensure the Company’s continued solvency." The board had rejected two of the three takeover offers, including one from IFX Payments. The board sought a bridging deal with IFX Payments to meet its liquidity needs. Argentex had announced on April 25 that it had reached a deal to buy IFX for approximately 3 million pounds. CEO Ormonde was leaving immediately. Argentex shares began trading again this week and fell 91%. The company announced that it had received a loan of 20 million pounds from IFX, and that Rudolph, the finance chief along with other board members had resigned. ($1 = 0.7505 pounds)
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Attenborough's new film shows both destruction and hope for the oceans of our planet
In a new documentary premiering on Tuesday, British naturalist David Attenborough said there was hope for the future health of our oceans. The film shows the extent of human-caused damage and the oceans’ capacity to recover. Attenborough's latest work, "Ocean", charts the challenges that the seas have faced over the course of his career, from industrial fishing practices and coral bleaching to destructive industrial fishing. In a trailer for the film, he says, "I now understand that the most important place on Earth, is not on land but at sea." The release of the film in its entirety coincides with Attenborough’s 99th Birthday. The premiere will take place in London on Tuesday, with a red carpet and celebrities walking the blue one. Attenborough stated that despite depicting the current bleak state of ocean health, discoveries made during the filming provide hope. He said, "The ocean is capable of recovering faster than we ever thought possible. It can bounce back to its life." "If we can save the ocean, we will save our planet." "After a lifetime spent filming our planet, I'm certain that nothing is more vital." The release of the film comes before the United Nations Ocean Conference in Nice, France in June, where it is hoped that more countries will ratify an agreement for 2023 to protect ocean biodiversity. Only 21 countries have signed the agreement, far short of the required 60. (Reporting by Susanna Twidale, Editing by Hugh Lawson).
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Copper boosted by weaker dollar and focus on tariff tensions
The dollar eased on Tuesday, but the impact of a slowdown in global demand and growth due to U.S. tariffs on imports and the trade war between China & the United States weighed on sentiment. At 1053 GMT, the benchmark copper price on London Metal Exchange was up by 0.7% to $9,436 per metric tonne. Tom Price, Panmure Liberum's analyst, said: "We are neutral for now and bearish in the second half of the calendar year due to seasonality and policy changes." Tariffs will hurt this year's trade once they have a full impact. The focus is now on whether the trade tensions will reduce after China announced last week that it was evaluating a proposal to hold discussions over U.S. president Donald Trump's tariffs of 145%. China's Commerce Ministry stated that Beijing was open to discussions, signaling a possible de-escalation of the trade war. China is the largest consumer of industrial metals, such as copper. Copper is used in power and construction industries. Copper stocks monitored by the Shanghai Futures Exchange, or ShFE, in warehouses was a positive for traders. Around 89,000 tonnes have fallen nearly 70% from late February, and are now at their lowest level since mid-January. Traders said that the expectations of a copper market surplus are worrying. According to a survey released last week, the copper market will have a surplus of over 60,000 tons in this year. This will be followed by a deficit in 2026. Edward Meir of Marex, the consultant, said that he believes these estimates will come down in time, particularly if supply issues continue. He was referring to the shortages in concentrates used to produce copper metal. Technically, copper has strong support around $9,310 to $9,315 at the convergence of the 100-day and 200-day moving averges. Around $9,475, or the 50-day average, is where resistance on the upside lies. The lower dollar price of metals, which is cheaper for holders other currencies, would increase demand. Aluminium dropped 0.5%, to $2.419 per ton. Zinc increased by 0.7%, to $2.626, while lead rose 0.3%, to $1.939; tin rose 3.5%, to $31,775; and nickel increased 0.8%, to $15.610 per ton. Reporting by Pratima Deai. Mark Potter edited the article.
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Marathon Petroleum, a top US refiner, suffers a quarterly loss due to lower margins
Marathon Petroleum reported a loss for the first quarter. The company is the latest U.S. refining firm to be hit by reduced margins in a period of increased maintenance and turnaround activities across the industry. The company reported that the results represented the second largest planned maintenance quarter of its history. The Findlay-based company reported a refining margin of $13.38 per bar in the first quarter. This compares to $19.35 in 2024. Turnaround activity, also known as planned maintenance, is usually performed by refineries in the first quarter of the year to prepare them for the increased demand during summer driving season. The scheduled downtime limits the refineries' utilization, which in turn affects their ability to maximize margins. It also impacts quarterly performance. U.S. refinery margins as measured by the 3-2-1 Crack Spread The market has recovered in the first quarter of 2025, after hitting multi-year lows. However, it continues to be under pressure due to lingering challenges. Rivals Phillips 66, Valero Energy and HF Sinclair reported losses as well. Marathon CEO Maryann Manen stated in a press release that "we are well positioned to meet the summer demand, as seasonal trends will improve margins. We remain optimistic about its long-term prospects." Marathon, the largest U.S. refiner in terms of volume, reported that its crude capacity was utilized at 89% during the third quarter, which resulted in a total throughput 2.8 million barrels a day (bpd), up from 2.7 million bpd one year ago. The company anticipates a total refinery output of 2.9 millions bpd in the second quarter. The company's net loss for the quarter ended March was $74m, or 24c per share. This compares to a profit in the previous year of $937m, or $2.58/share. According to data compiled by LSEG, analysts had on average expected a loss per share of 53 cents. (Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila)
Dollar slips as stocks fall on lack of progress in trade
The dollar fell against other major currencies on Tuesday as worries about tariffs and the impact they have on the economy continued to linger. Meanwhile, the focus was on the Federal Reserve policy announcement scheduled for Wednesday.
Investors have been focused on the possibility that trade tensions could be eased between the U.S.
Donald Trump, the U.S. president, said on Sunday Washington was meeting with many nations, including China. His main priority in dealing with China is securing a fair agreement.
Lars Skovgaard is senior investment strategist for Danske Bank. He said, "We have seen a backpedaling and the trade risks are lower."
Investors are left to try and make sense of headlines from the White House, but with little information about trade talks.
Skovgaard said, "Now we have to see some deals announced or else the stock market will fall again."
The STOXX 600 Europe index is down by 0.4% Tuesday, but it remains near its closing level of April 2, when Trump announced his tariff proposal.
The FTSE 100 in Britain was up by 0.1%, and is on course to reach a 16th consecutive positive closing record. Germany's DAX fell 1%.
Investors also processed a surprise in Germany, where conservative leader Friedrich Merz was unable to gain the majority required to become chancellor. This unexpected setback came for his new coalition of the Social Democrats.
With Japan closed on a holiday, MSCI’s broadest Asia-Pacific share index outside Japan was flat.
The blue-chip index in Hong Kong and the Hang Seng index in China both rose by about 1% after returning from a long holiday.
The Federal Reserve policy decision is expected to be announced on Wednesday. While the central bank will likely keep interest rates unchanged, the focus will be on the policymakers' ability to navigate a path that includes tariffs.
Christian Scherrmann is the chief U.S. economics at DWS. "We believe they will adopt a slightly more hawkish tonality, but in a direction more towards an extended pause rather than a possible hike."
LSEG data revealed that traders are pricing 75 basis points in easing for this year, with the first possible move in July.
DOLLAR RISES, DOLLAR SLIDES VS ASIAN FX
Since April, Trump's unpredictable trade policies have fueled significant waves of dollar sales as investors moved away from U.S.-based assets, driving the euro, Swiss franc and yen higher.
The euro was up by 0.3% on Tuesday against the dollar, at $1.1347. And the yen rose 0.5% to 142.95 dollars.
The record-breaking surge of the Taiwan dollar in recent sessions has shown that dollar selling has spread across other Asian currencies. This has led to speculations about a possible revaluation to gain U.S. concessions on trade.
The rally was a sign that a major unwinding is underway. It also shed light on a single economy amongst many where large dollar long positions have been built up by exporters and insurance companies over the years due to big trade surpluses. These positions are now being questioned and put on edge.
On Tuesday, the Taiwan dollar traded at 30.28 dollars for every dollar in the U.S., a relatively low rate compared to Monday's near-three-year high 29.59 dollars.
On Tuesday, the focus shifted to Hong Kong where the de-facto central bank purchased $7.8 billion in order to prevent the local currency strengthening and breaking the peg with the greenback.
Charu Chanana is the chief investment strategist of Saxo Singapore. She said that Asian FX was where it's at today.
If these currencies continue to strengthen sharply, this could cause fears of a "reverse Asian currency crises", with possible ripple effects on the bond market, amid fears that Asian Institutions reassess unhedged Treasury holdings.
The Hong Kong Monetary Authority announced on Tuesday that it was diversifying its currency exposure to reduce risk in its portfolio of investments.
China's Yuan has strengthened on the mainland to its highest rate since November, at 7.2105 per dollar.
Oil prices rose in commodities after hitting four-year highs the previous session, mainly due to OPEC+'s decision to increase output. Brent crude futures rose 2.2% to $61.55 a barrel.
On safe-haven demand, gold prices increased 1.2% in a week to $3.375/oz. (Editing by Sam Holmes and Kate Mayberry)
(source: Reuters)