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Eni's (E) Q3 Earnings Surpass Estimates, Shares Increase 12%

Eni SpA E shares increased 12% since it reported strong results for the third quarter of 2022.

Eni reported third-quarter adjusted earnings from continuing operations of $2.14 per American Depository Receipt (“ADR”), beating the Zacks Consensus Estimate of $2.04. The bottom line improved from the year-ago quarter’s 93 cents per ADR.

Total quarterly revenues of $37,866 million increased from $22,702 million a year ago.

The strong quarterly results were driven by the higher average realized price of liquids and natural gas.

Eni SpA Price, Consensus and EPS Surprise

 

Eni SpA Price, Consensus and EPS Surprise
Eni SpA Price, Consensus and EPS Surprise

Eni SpA price-consensus-eps-surprise-chart | Eni SpA Quote

 

Operational Performance

The company operates through four business segments — Exploration & Production, Global Gas & LNG Portfolio, Refining & Marketing and Chemicals and Plenitude & Power.

Exploration & Production

The total oil and gas production in the third quarter was 1,578 thousand barrels of oil equivalent per day (MBoe/d), down 7% from 1,688 MBoe/d recorded in the prior-year quarter.

Liquids production was 707 thousand barrels per day (MBbl/d), down 12% from the year-ago quarter’s level of 805 MBbl/d. Natural gas production declined 2% year over year to 4,583 million cubic feet per day.

The average realized price of liquids was $91.51 per barrel, up 33% from the $68.83 reported a year ago. The realized natural gas price was $9.08 per thousand cubic feet, up 43% from $6.33 a year ago.

The higher realizations of average liquid and natural gas prices aided the company’s Exploration & Production segment. The segment reported a profit of €4,272 million, skyrocketing from the €2,444 million recorded in the September-end quarter of 2021.

Global Gas & LNG Portfolio

Eni’s worldwide natural gas sales in the September-end quarter were recorded at 13.33 billion cubic meters (bcm), down 22% year over year.

The integrated energy major’s Global Gas & LNG Portfolio business segment reported an adjusted operating profit of €1,083 million, up from the year-ago profit of €50 million. Strong business performance aided the segment.

Refining & Marketing and Chemicals

For the September-end quarter, total refinery throughputs were recorded at 7.05 million tons (mmtons), down 3% year over year. Petrochemical product sales declined 24% year over year to 0.77 mmtons in the third quarter of 2022.

For the quarter under review, the segment reported an adjusted operating profit of €537 million, significantly higher than €186 million in the year-ago quarter, primarily due to increased production in the Refining and Marketing segment.

Plenitude & Power

Retail gas sales managed by Plenitude declined 3% year over year to 0.61 bcm. Power sales in the open market declined 24% year over year.

Overall, from Plenitude & Power, the company reported a profit of €172 million, reflecting a 169% year-over-year increase.

Financials

As of Sept 30, Eni had long-term debt of €19,845 million and cash and cash equivalents of €11,480 million. Its debt to capitalization was 32.1%.

For the reported quarter, net cash generated by operating activities amounted to €5,586 million. Capital expenditure totaled €2,099 million.

Outlook

For 2022, Eni expects a total hydrocarbon production of 1.63 million boe/d. The company expects to discover new exploration resources of around 750 million boe this year.

Eni projects its 2022 cash flow from operations, before changes in working capital at replacement cost, to grow to €20 billion.

Moreover, the integrated energy major reiterated its organic capital expenditure guidance of €8.3 billion for the year.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector might also look at the following stocks that reported solid third-quarter earnings and carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BP plc BP reported third-quarter adjusted earnings of $2.59 per American Depositary Share on a replacement-cost basis, excluding non-operating items, beating the Zacks Consensus Estimate of earnings of $1.94 per share. Strong quarterly earnings were driven by higher production and realizations of commodity prices.

BP announced plans to execute a $2.5-billion share buyback program, which is expected to complete before its fourth-quarter results. BP anticipates buying back $1 billion worth of shares every quarter, considering Brent crude price of $60 per barrel.

Liberty Energy Inc. LBRT announced third-quarter 2022 earnings per share of 78 cents, which beat the Zacks Consensus Estimate of 63 cents. The outperformance reflects the impacts of strong execution, higher activity and increased service pricing, which more than offset rising costs.

As of Sep 30, 2022, Liberty had $298 million of available liquidity, including $24 million of cash on hand and supported by the revolving credit facility. LBRT’s debt-to-capitalization stands at just 15.2% compared with most peers hugely burdened with debts.

Phillips 66 PSX reported third-quarter 2022 adjusted earnings per share of $6.46, comfortably beating the Zacks Consensus Estimate of $4.98. Strong quarterly earnings were driven by robust refining margins worldwide.

Phillips 66’s board of directors recently authorized a $5-billion increase to its stock repurchase program, bringing the total share repurchases authorized since 2012 to $20 billion. This represents Phillips 66’s strong focus on returning capital to stockholders.

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