Although Cummins' consumer-related markers were affected by the continued economic weakness in the U.S., management stated that its global growth strategy was clearly effective in helping the company achieve its second quarter performance.
The company raised its sales guidance for fiscal 2008 to a 15% increase, up from the previous guidance of 12%. However, the company's future results could be negatively impacted by rising commodity costs and general economic conditions.
Petrobras-Petroleo Brasileiro S.A. (PBR.A - Get Report) is the national oil company of Brazil, engaging in the exploration, exploitation and production of oil from reservoir wells, shale and other sources. This integrated energy company began domestic production in 1954 and international production in 1972.
Petrobras has been rated a buy September 2004. The company reported that its net income increased 29% year over year in the second quarter of fiscal 2008, fueled by higher international oil prices, higher oil and gas production and the increase in gasoline and diesel prices in Brazil in May.In its release discussing the quarterly results, management reported that operating cash flow increased 27% over the same quarter last year. It also reported that domestic sales of oil products and national gas increased 8% when compared with the second quarter of fiscal 2007. Although almost any stock can decline in a broad market decline, we feel that Petrobras should continue to move higher. The company continues to make investments in human resources and infrastructure in order to achieve its objectives, including investing in refineries and vertical integration of the production change to add value to its oil, thereby generating higher revenue from domestic and international sales. Additionally, the company made several new discoveries during the second quarter, such as light oil in shallow water in the southern portion of the Santos Basin. Bear in mind, however, that any unexpected sharp downturn in oil and gas prices could negatively affect Petrobras' future earnings. In addition, oil prices are highly volatile and cyclical in nature and could be vulnerable to weaker economic conditions. High prices may also create heightened demand for lower-cost alternatives, and could thus hurt overall demand for oil and gas products.