Trouble in the Oil Patch; Look for Q4 Misses, Says Barclays

Refining & marketing and chemicals results among the big oil companies could hurt fourth quarter earnings, and Barclays analyst Paul Cheng thinks consensus estimates are still a little too optimistic for the sector.

“While the major oil companies’ 4Q11 result should be helped by slightly stronger-than-expected oil prices, results will not be immune from the shortfall in their downstream and chemical results as well as the weakness in the North America gas market. Among the Big 3, we think Conoco Philips (COP) will likely report a somewhat bigger miss than Chevron (CVX) and Exxon Mobil (XOM) due to its relatively heavy exposure in refining and North America gas market.”

Also, Exxon’s earnings may not be the highest quality, which could hurt shares when the company reports earnings, writes Cheng.

“In addition, while we think XOM will report results in line or exceed expectations, the earnings quality may not be the highest since we think the result will include several hundred million of asset sales gain related to the closing of the Apache North Sea sales.”

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UPDATE 1-Constellation Brands Q3 misses Wall Street view

* Q3 adj EPS $0.50 vs est. $0.52

* Q3 rev down 27 pct to $701 mln vs est. $720.4 mln

* Backs fiscal 2012 EPS outlook

* Shares fall as much as 6 percent

Jan 5 (Reuters) - Constellation Brands Inc reported quarterly results that lagged analysts' expectations on lower volume in its North American segment, sending the world's largest branded wine maker's shares down 6 percent.

However, for the full year, the company reiterated its earnings outlook, as it expects to see improving sales trends in the fourth quarter.

Constellation, whose brands include Robert Mondavi and Ravenswood, posted a 27 percent decline in third-quarter net sales to $701 million, hurt partly by the divestiture of its Australian and U.K. wine business.

North American net sales fell 8 percent.

The New-York based Constellation's equity income from half of a joint venture with Mexico's Grupo Modelo that imports Corona beer into the United States declined 25 percent.

Excluding items, Constellation earned 50 cents a share.

Analysts, on average, had expected earnings of 52 cents a share on revenue of $720.4 million, according to Thomson Reuters I/B/E/S.

Auriga analyst Gary Albanese, who expects Constellation to meet its full-year earnings goal, however, said the company continues to do well in terms of margins and free cash flow.

The company's shares were trading down about 5.5 percent at $19.30 on Thursday morning on the New York Stock Exchange. The shares, which have risen about 12 percent since the company reported second-quarter results in October last year, touched a low of $19.15 earlier.

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