The ELMO Software Ltd (ASX: ELO) share price will be on watch this morning after the company released a business update subsequent to the close of trade yesterday.

ELMO is a cloud-based provider of human capital management software, primarily in Australia and New Zealand. Its integrated product suite covers the entire gamut of an employee’s lifecycle, such as recruiting, onboarding, rostering, payroll, and performance management.

What did ELMO announce?

After the market closed yesterday, ELMO released a trading update in which it provided updated FY20 guidance.

Highlights include the reinstatement of annual recurring revenue guidance to between $55 million and $57 million, and upgraded earnings before interest, tax, depreciation and amortisation (EBITDA) guidance. 

FY20 EBITDA guidance has now been set to between negative $2.5 million and negative $4.5 million. This is up from the previously guided range of negative $4 million to negative $6 million.

Meanwhile, revenue guidance remains unchanged at between $50 million and $52 million.

Along with the updated guidance, ELMO revealed it remains well-capitalised with a cash balance of $140.3 million and no debt as of 31 May 2020. The company’s cash reserves have been boosted by a recently completed $72.8 million capital raising. These funds will be used to support organic growth initiatives and acquisition opportunities.

In terms of operations, ELMO noted that staff have been working remotely since 23 March. As such, its operations have continued without disruption. In line with the easing of lockdown restrictions, the company has commenced the re-opening of offices in Australia and New Zealand.

With a shored up balance sheet, ELMO believes it is well-positioned to take advantage of the current market conditions. Widespread remote-based working has created tailwinds for cloud-based software adoption, and there are increased acquisition opportunities in the ANZ region and the UK. 

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Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia has recommended Elmo Software. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (Index:^AXJO) is set to tumble this morning but there’s a group of ASX stocks that could buck the downtrend.

The Brent crude oil price staged a late turnaround last night after Libya’s ceased production from its top oil field, according to Bloomberg.

The Brent price jumped 1% to US$41.18 a barrel after falling below US$40 a barrel earlier in the trading session.

Why ASX energy stocks can outperform

This could set the Santos Ltd (ASX: STO) share price, Woodside Petroleum Limited (ASX: WPL) share price and Oil Search Limited (ASX: OSH) share price on a positive footing.

If so, the sector will stand in contrast to the expected broad-based weakness on the ASX as US and European share markets fell overnight.

The weakness stems from concerns that risk assets are overbought with investor optimism running ahead of the COVID-19 reality.

What’s supporting the oil price

But it isn’t only the shutdown of Libya’s main oil field that’s supporting crude. Demand for gasoline is also rising as some major US cities, such as New Jersey end their lockdowns.

The latest data from the Energy Information Administration showed gasoline consumption increased for a second week, reported Bloomberg.

However, other crude products such as diesel and jet fuel declined with the former down 20% and the latter crashing 80% from this time last year.

Diesel rains on gasoline’s parade

No surprises as diesel is tied to industrial production, which is still scraping the floor due to the coronavirus shutdown.

Meanwhile, airlines are still largely grounded and are likely to stay that way for a long while. This is why refineries are switching to producing more diesel.

But some experts believe that low diesel prices will cap any rally in gasoline because refineries cannot limit the production of diesel without negatively impacting on gasoline output.

Oil headwinds aren’t abating

Further, the expended supply curbs by Saudi Arabia is expected to end this month, and that means rising inventories of crude is likely to overwhelm any increase in demand from consumers.

The price of crude is also at a level where US shale oil producers can profitably restart pumping again, assuming that oil stabilises around current levels.  

The oil market is walking a tightrope and its easy to see how the unstable Libyan regime can send prices swinging wildly.

If ASX energy stocks don’t find support when the market opens, it will probably be because the outlook for the market remains too difficult to predict.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post These ASX shares could defy the market sell-off this morning appeared first on Motley Fool Australia.

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