By coinnews 
00:00 Seana Smith
Now it’s time for some of today’s trending tickers, Yahoo Finance’s Alexandra Canal’s gonna be here with me to check on and on shares of some defense names, as well as Halliburton and BP. Let’s start with those US defense contractors, out with earnings today issuing some concerns and warnings about the effect of President Trump’s tariffs. RTX Corp, formally known as Raytheon Technologies, emphasizing a potential $850 million hit in reduced profits from new levies on metals and on China. Northrop Grumman saying today and it’s earning’s call that profit margins may narrow. And then Lockheed Martin of the three is the sole gain, gainer today, it reaffirmed its forecast for the year. Of these, Northrop is the worst performer Ali, it’s actually the worst performer in the S&P 500 today. Um, but it it’s really interesting what these companies had to say.
01:07 Alexandra Canal
Yeah, and with that company in particular, definitely the most cautious tone, I would say, on the street out of the three, considering we did see that earnings miss, that lowering of the forecast even without some of these tariff impacts. But a mixed bag when we hear about the tariff impact. RTX is one with that $850 million estimate wide range there. $250 million projected hit from tariffs on Canada and Mexico, $250 million from China, $300 million from other countries and then $50 million on new US aluminum and steel import taxes. And the commercial unit, that’s one that’s gonna bear the brunt of these costs, the defense unit relatively insulated. Management did say on the call that they’re looking at options like price increases, although, like we’ve heard from other companies, that’s not going to totally offset some of that tariff impact. And then the company like Lockheed, they didn’t provide exact tariff figures in that reiterated guidance, although analysts have said they are largely insulated from a lot of this due to the fact that they have contracts within the US, strong domestic supply chains, so not as exposed to some of those more international trade disruptions.
02:45 Seana Smith
Yeah, I’m finding it really interesting as we get into earning season, the granularity with which different companies are disclosing, you know, here’s this specific tariff hit from this, here’s where we may move things around. So it’s been, it’s been interesting. Another example is Halliburton because that company also talked about the tariff impact, it warned investors that tariffs will have an impact of two to three cents per share during the second quarter with 60% of the hit affecting its completions and production unit. Company also reported adjusted earnings per share and revenue for the first quarter that fell year-over-year. This is the world’s biggest producer of hydraulic fracturing services, or fracking as we call it, and other oil field services. Um, and this is a company that is, you know, it’s got drilling, so it’s importing things that it is either using to construct or enact some of these services.
04:19 Alexandra Canal
Yeah, and with steel and aluminum tariffs, that’s something that’s definitely going to impact the costs of a lot of this equipment. On the call, management stressed the importance of greater clarity to really understand what the impact could be, what levers they could pull to potentially offset that. But digging into the report itself, I thought it was interesting to see such weakness in North American drilling activity and we were down 12% year-over-year. Several factors there, we have tightened capital budgets, obviously with the macro uncertainty, everything that could come out with tariffs, also the volatility and some of these commodity prices also weighing there. But international operations was actually able to provide some relief, 6% revenue increase in the Middle East and Asia along with growth in Europe, Africa. But clearly, for a company like Halliburton, which we were just laying out, a lot of challenges ahead that they’re going to have to sift through and a lot of uncertainty in the macro right now.
05:29 Seana Smith
Yeah, definitely for all of these companies. Um, and then let’s talk about BP, those shares are getting a boost. Activist hedge fund Elliot Management announcing via a regulatory notice that they now hold just over 5% of the voting rights in BP. That makes Elliot BP’s second biggest shareholder after BlackRock at 9.2% and ahead of Vanguard at just under 5%. And Elliot um is, tends to be a, not a quiet and meek shareholder but is pushing for changes at BP.
06:16 Alexandra Canal
Yeah, and some of those changes include increase annual free cash flow by 40% to $20 billion by 2027, reduce annual capex to $12 billion down from the current 13 to $15 billion, divest from solar and offshore wind operations and focus on more traditional oil and gas operations. And this pretty much aligns with the recent strategy shift that we’ve seen from this company, this fundamental reset. But the reaction on the street has been mixed because on the one hand, there is this further retreat from those climate pledges that they made in 2020, but on the other hand we’re seeing shares tick up a little higher today perhaps this means increased profitability for the future, but that will likely come at the risk of some of those climate goals.
07:13 Seana Smith
Yeah, it’s, the shift in BP over the past few years has been really interesting as it went from, it went to Beyond Petroleum if you recall that campaign, and the company pushing into that, then following the ouster of the CEO for personal behavior, then a new CEO, and then this pivot away from those climate goals, so we’ll see how far they take it in the other direction.
07:43 Alexandra Canal
Searching for their identity.
07:46 Seana Smith
Yeah, thanks Ali, I appreciate it.
07:49 Alexandra Canal
Of course.