11 COMPANIES LOST VAST SUMS OF MONEY IN 2015
Energy firms lead way, with Apache reporting $23 billion regression
Investors knew it was going to be an ugly earnings season. But some of the losses are simply obscene.
There are 11 companies in the broad Russell 3000 index that have reported staggering net losses in the just-completed calendar year, according to a USA TODAY analysis of data from S&P Global Market Intelligence. Each reported net losses of $4 billion or more — dwarfing even the impressive $1 billion net loss reported Thursday by struggling retailer Sears.
The imploding price of oil is the single biggest cause. Of the 11 companies that posted the massive losses, eight are in the energy sector. Highlighting the swiftness of the destruction, eight of the 11 companies were profitable in 2014. Shares of these 11 companies, on average, have lost half their value in the past 12 months. Shares of all but one, General Electric, are down over the past 12 months.
More than 90% of the companies in the Standard & Poor’s 500 have reported their fourth-quarter results so far, and profit during the quarter dropped 4.5% from the same year-ago period, S&P Global says.
It’s the second quarterly drop in profit for the companies. For the year, profits at S&P 500 firms dropped 0.7%.
Apache holds the distinction of reporting the biggest net loss of any company in the Russell 3000 index with its deficit totaling a whopping $23 billion. Not only did the energy company lose nearly four times more money than it brought in as revenue last year, $6.4 billion, but it lost dra- matically more than the $2.9 billion in 2014. The stock price is down 45% the past 12 months. Analysts expect the company to report another adjusted net loss of $760 million in 2016.
Outside of energy, Yahoo is the only information technology company to post an outsized net loss in 2015, to the tune of $4.4 billion. Shares are down 29% over the past 12 months, even though investors expect the media company to make a major change to its structure this year, including its lucrative stake in Chinese e-commerce company Alibaba. Analysts, nonetheless, expect Yahoo to post an adjusted profit of $502 million this year.
Some losses are more a function of accounting than the underlying health of the business. The best example is General Electric, which has been aggressively restructuring. GE reported a net loss of $6 billion in 2015, the result of businesses it discontinued or sold. GE reported more than $7.4 billion in net losses from “discontinued operations.” Excluding those units, GE was profitable to the tune of $1.7 billion from continuing operations. Shares are up more than 12% the past 12 months. Analysts expect GE to report adjusted profit of nearly $14 billion in 2016.
Such huge losses add dramatic emphasis to what has been a very difficult earnings season.