Equinor (EQNR) Stock Gains 4% Since Q2 Earnings Beat Estimates

Equinor ASA’s EQNR shares have gained almost 4% since it reported strong results for the second quarter of 2022.

Equinor reported second-quarter adjusted earnings per share of $1.56, beating the Zacks Consensus Estimate of $1.44. The bottom line significantly improved from the year-ago quarter’s 49 cents per share.

Total quarterly revenues increased to $36,387 million from $17,462 million in the prior-year quarter.

The strong quarterly results were aided by higher commodity prices and increased contributions from the Martin Linge oil field.

Equinor ASA Price, Consensus and EPS Surprise

 

Equinor ASA Price, Consensus and EPS Surprise

Equinor ASA price-consensus-eps-surprise-chart | Equinor ASA Quote

Share Buybacks

For 2022, Equinor announced the increase of the share buy-back program of up to $6 billion from the prior stated $5 billion.

Equinor’s board increased its extraordinary cash dividend to 50 cents per share from 20 cents per share for the second and third quarters of 2022. This reflects the firm’s strong commitment to returning capital to shareholders.

Segmental Analysis

Exploration & Production Norway (E&P Norway): The segment reported adjusted earnings of $14,330 million, improving drastically from $3,967 million in the year-ago quarter. The improvement was led by higher production and liquid prices.

The company’s average daily production of liquids and gas jumped 7% year over year to 1,343 thousand barrels of oil equivalent per day (MBoe/d) due to the increased contributions from the Martin Linge oil field.

E&P International: The segment’s adjusted operating profit was recorded at $1,111 million, up from the year-ago quarter’s profit of $400 million. Improvement in liquid and gas prices contributed to the outperformance.

Average daily equity production of liquids and gas declined to 306 MBoe/d from 349 MBoe/d in the year-ago quarter. The segment was affected by a natural decline in mature fields and no Russia production volumes.

E&P USA: Through the segment, Equinor generated an adjusted quarterly profit of $881 million, up from $230 million reported in the June-end quarter of 2021. The outperformance was led by higher commodity prices.

The integrated firm’s average equity production of liquids and gas was recorded at 335 MBoe/d, down from 391 MBoe/d in the year-ago quarter due to the divestment of unconventional U.S. onshore assets and natural decline from the Appalachia Basin assets.

Marketing, Midstream & Processing: The segment reported an adjusted profit of $1,310 million, significantly up from $154 million a year ago.

Renewables: The segment reported an adjusted loss of $42 million, wider than a loss of $31 million in the year-ago quarter. Higher business development costs primarily hurt the segment.

Free Cash Flow

In the June-end quarter, Equinor generated a free cash flow of $6,964 million, improving from $4,511 million in the year-ago period. The improvement resulted from increased operating cash flows, backed by higher liquids and gas prices.

Balance Sheet

As of Jun 30, 2022, Equinor reported $20,582 million in cash and cash equivalents. The company’s long-term debt was $26,380 million at the second-quarter end.

Outlook

Equinor reaffirmed production growth expectations at 2% for 2022.

For the 2022-2023 period, the oil major expects average organic capital spending of $10 billion per annum. For the 2024-2025 period, spending is expected to increase to $12 billion per annum.

Zacks Rank & Other Stocks to Consider

Equinor currently sports a Zacks Rank #1 (Strong Buy).

Investors interested in the energy sector might look at the following companies that also presently sport a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Exxon Mobil Corporation XOM reported second-quarter 2022 earnings per share of $4.14 (excluding identified items), beating the Zacks Consensus Estimate of $3.80. Strong earnings were driven by higher realized commodity prices and solid refinery utilization.

ExxonMobil has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Growth and B for Value. XOM is expected to see earnings growth of 131% for 2022.

BP plc BP reported second-quarter 2022 adjusted earnings of $2.61 per American Depositary Share on a replacement-cost basis, excluding non-operating items. The company beat the Zacks Consensus Estimate of earnings of $2.20 per share on higher production and commodity price realizations.

BP has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Value and Growth. BP is expected to see earnings growth of 116.2% for 2022.

Cenovus Energy Inc. CVE reported second-quarter earnings per share of 93 cents, beating the Zacks Consensus Estimate of earnings of 89 cents. Strong quarterly earnings were driven by higher daily oil sand production.

Cenovus has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Growth and Value. CVE is expected to see earnings growth of 321% for 2022.

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