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Yahoo Earnings Exceed Expectations As Merger, Security Breach Loom

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  • Yahoo Earnings Exceed Expectations

Yahoo managed to beat expectations Tuesday by reporting an adjusted quarterly profit of 20 cents per share – about 6 cents more than analysts had projected – on revenue of $1.3 billion, which was in line with expectations.

The financial report comes as Yahoo is set to be acquired by Verizon, though a recent hack of the pioneering Internet company has the telecommunications firm on edge over the planned merger.

Verizon said in July it would acquire Yahoo for $4.8 billion with the deal expected to close early next year. Since then, Yahoo disclosed that 500 million user accounts were stolen two years ago and 200 million accounts were stolen two months ago.

Some outlets reported that the revelation of security breeches amount to a material impact that could result in Verizon pulling out of the deal, but Verizon CEO Lowell McAdam at a conference this month that such a notion was “total speculation.”

“We still see a real value to the asset,” McAdam said at the Internet Association’s Virtuous Circle conference in Menlo Park, California. “We’re still understanding what was going on, to define whether it’s a material impact to the business or not. But the industrial logic of doing this merger still makes a lot of sense.”

Because of the pending merger, Yahoo didn’t bother with a conference call to discuss it’s financial results.

“We take deep responsibility in protecting our users and the security of their information,” Yahoo CEO Marissa Mayer said in a statement accompanying the earnings report. “We’re working hard to retain their trust and are heartened by their continued loyalty as seen in our user engagement trends.”

In most categories, Yahoo reported rising revenue, an exception being its display advertising business, where revenue fell 7 percent to $476 million. The price per ad, though, increased 1 percent quarter over quarter.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Crude Oil Fuels Nigeria’s Exports Amid N35.9tn Import Surge in 2023

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Trade - Investors King

Nigeria’s imports surged to N35.8 trillion in 2023, according to the National Bureau of Statistics (NBS).

However, amidst this import boom, the country’s exports were largely driven by its lucrative crude oil industry.

Nigeria’s total exports stood at N35.9 trillion with N29 trillion of the total receipt coming from crude oil exports. This reliance on crude oil exports underscores the enduring significance of the commodity to Nigeria’s economy, despite ongoing efforts to diversify revenue streams.

While agricultural exports contributed N1.2 trillion and manufactured goods accounted for N778 billion, it is evident that crude oil remains the primary driver of Nigeria’s export revenue.

The country’s ability to churn out such substantial export value, particularly in the crude oil sector, highlights its pivotal position in the global energy market.

Conversely, the surge in imports reflects a growing demand for goods and services within Nigeria, with manufactured imports topping the chart at N18.3 trillion.

Agricultural imports stood at N2.2 trillion, while imports of raw materials totaled N3 trillion.

The trade imbalance, evidenced by Nigeria’s significant imports compared to its export earnings, poses challenges for the country’s economic equilibrium.

However, amidst these concerns, the role of crude oil in driving export revenues underscores the need for continued investment and strategic planning to sustain Nigeria’s position in the global market.

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Crude Oil

Oil Prices Rise in Asian Trade as Supply Concerns Heighten Amid Russian Attacks

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Oil prices surged on Monday during the Asian trading session as concerns over global supply intensified amidst ongoing attacks on Russian energy infrastructure.

Brent crude oil, against which Nigerian oil is priced, climbed by 47 cents to $85.81 a barrel while the U.S. West Texas Intermediate (WTI) crude rose by 49 cents to $81.53 a barrel.

The market’s bullish sentiment was largely influenced by recent attacks on Russian refineries, which added $2-$3 per barrel of risk premium to crude last week.

These attacks persisted over the weekend, further heightening concerns about supply disruptions.

One of the strikes ignited a brief fire at the Slavyansk refinery in Kasnodar on Saturday. This refinery processes approximately 8.5 million metric tons of crude oil annually, equating to 170,000 barrels per day.

Consequently, a Reuters analysis revealed that these attacks have idled around 7% of Russian refining capacity in the first quarter of the year.

The impacted refining complexes play a crucial role in processing and exporting crude varieties to various markets, including China and India.

The escalating tensions in the Middle East also contributed to market unease. Israeli Prime Minister Benjamin Netanyahu confirmed plans to push into Gaza’s Rafah enclave, disregarding pressure from Israel’s allies.

This move raised concerns about regional stability, amplifying geopolitical risks in the oil market.

Investors are closely monitoring the outcome of the U.S. Federal Reserve’s two-day meeting scheduled to conclude on Wednesday.

The Fed’s decision regarding interest rates could provide further clarity on market direction, potentially impacting oil prices in the near term.

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Commodities

Commodity Trading Industry Hits $100 Billion Profit, Second-Best Year on Record

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The global commodities market has reported $100 billion in profits despite facing challenges and disruptions, making its second-best year ever. 

According to analysis from consultancy firm Oliver Wyman LLC, while earnings have dipped slightly from the record-breaking levels of 2022, this year’s profits easily surpass previous highlights, including those seen during the global financial crisis of 2008-2009.

Consultant Adam Perkins attributes this success to favorable margins driven by ongoing supply-demand dynamics, despite the volatility seen in various sectors.

While specific financial results for many players within the industry are yet to be made public, the report indicates that major independent trading houses are expected to show an average drop of over 30% from the record levels of 2022.

However, disruptions in supply chains and shortages of diesel and fuel oil have somewhat offset the decline in volatility related to Russian crude oil.

These profits have enabled commodity trading firms to bolster their positions as key providers of energy, metals, and food resources on a global scale.

With significant investments in oil refineries, storage facilities, power plants, and acquisitions of other trading companies, these firms are solidifying their roles in shaping global supply chains.

Moreover, the windfall profits have led to executives and partners within these firms becoming multi-millionaires, facilitating a generational shift in leadership as seasoned traders retire.

Despite the pressure to uphold legacies and navigate increased scrutiny, the influx of new leadership presents opportunities for innovation and growth within the commodity trading sector.

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