With the fourth-quarter earnings season almost over, it’s time to sit back and analyze the bevy of ‘Big Oil’ firms that put in their reports. The world’s five biggest non-state oil firms – traditionally known as supermajors – reported profits that jumped in the fourth quarter compared to the same period a year before. All but one of the companies also managed to beat the Zacks Consensus Estimate. At the same time, a number of them jumped on the results, reflecting improvement in free cash flow generation.
In this writeup, we dive into the results from U.S.-based energy behemoths ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) plus the three European majors – Royal Dutch Shell (LON:RDSa) plc RDS.A, BP plc (NYSE:BP) and TOTAL S.A. (NYSE:TOT) .
XOM
Earnings & Revenue: The company reported fourth-quarter adjusted earnings per share of $1.51, ahead of the Zacks Consensus Estimate of $1.08 and the year-ago profit of 88 cents. The outperformances were driven by robust downstream profits thanks to impressive margins from North American crude differentials, and ramped-up liquids production from the prolific Permian Basin.
Total revenues at the Irving, TX-based world's largest vertically integrated oil company was $71.9 billion, up 8% from a year ago. However, sales marginally lagged the Zacks Consensus Estimate of $74.2 billion due drop in crude price realizations.
Production: The production of oil and natural gas averaged 4,010 thousand barrels of oil-equivalent per day (MBOE/d) (59% oil), marginally higher than 3,991 MMBOE/d a year ago. Results were also above the Zacks Consensus Estimate of 3,921 MMBOE/d.
Free Cash Flow: In the fourth quarter, the company generated around $8.6 billion of cash from operating activities while shelling out $7.8 billion on capital expenditures for free cash flow of $0.8 billion. During the same period, ExxonMobil paid out $3.5 billion as dividends to its shareholders.
Debt: ExxonMobil's total debt is currently around $37.8 billion, down from $42.3 billion a year ago.
Share Price Impact: The company's shares rose more than 2% following the strong earnings beat.
CVX
Earnings & Revenue: The company reported fourth-quarter earnings per share of $2.06, ahead of the Zacks Consensus Estimate of $1.87 and the year-ago quarter’s earnings of 73 cents. The outperformances were driven by higher revenues, record production and rising oil price realizations.
Total revenues at the San Ramon, CA-based energy giant was $42.3 billion, up 12.5% from a year ago and beat the Zacks Consensus Estimate of $41.6 billion.
Production: The production of oil and natural gas averaged a record 3,083 MBOE/d (60% liquids), up 12.5% from last year. Overall volumes were also above the Zacks Consensus Estimate of 2,991 MBOE/d.
Free Cash Flow: In the fourth quarter, the company generated around $9.1 billion of cash from operating activities while shelling out $5.8 billion on capital expenditures for free cash flow of $3.3 billion. During the same period, Chevron paid out $2.1 billion as dividends to its shareholders and repurchased $1 billion worth of shares.
Debt: Chevron's total debt is currently around $34.5 billion, down from $38.8 billion a year ago.
Share Price Impact: The company's shares jumped more than 4% as production reached an all-time high and free cash flow went up significantly.
RDS.A
Earnings & Revenue: The company reported earnings per ADS (on a current cost of supplies basis, excluding items - the market’s preferred measure) of $1.38, above the Zacks Consensus Estimate of $1.30 and the year-ago profit of $1.04, driven by robust commodity price realizations and higher downstream earnings.
Total revenues at The Hague-based group were $104.6 billion, 18.7% above the fourth-quarter 2017 sales of $88.1 billion and beating the Zacks Consensus Estimate of $86.9 billion.
Production: The production of oil and natural gas averaged 2,809 MBOE/d (60% liquids), up 1% from last year.
Free Cash Flow: In the fourth quarter, the Zacks Rank #3 (Hold) company generated around $22 billion of cash from operating activities while shelling out $8 billion on capital expenditures for free cash flow of $14 billion. During the same period, Shell paid out $3.9 billion as dividends to its shareholders and repurchased $2.5 billion worth of shares (up to Jan 28).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Debt: As of Dec 31, 2018, the company had $76.8 billion in total debt, as against $85.7 billion at the end of 2017.
Share Price Impact: The company's shares surged around 5.5% as cash flow from operations soared 202% from the year-earlier level it announced the third instalment of its three-year $25 billion buyback program.
TOT
Earnings & Revenue: The company reported fourth-quarter operating earnings per share of $1.17, lagging the Zacks Consensus Estimate of $1.22 by 4.1% due to slightly weaker production in the Middle east and. However, the bottom line improved from the year-ago profit of $1.04, driven by rising oil prices and solid production.
Total revenues at the Paris, France-based energy company was $46.3 billion, increasing 12% year over year.
Production: The production of oil and natural gas averaged 2,876 MBOE/d (55% liquids), up 10% from last year.
Free Cash Flow: In the fourth quarter, the company generated around $10.6 billion of cash from operating activities while shelling out $4.5 billion on capital expenditures for free cash flow of $6.1 billion. During the same period, TOTAL paid out around $700 million as dividends to its shareholders and repurchased $500 million worth of shares.
Debt: Net debt as of Dec 31, 2018 was $21.7 billion compared with $15.4 billion recorded in the corresponding period of 2017.
Share Price Impact: Despite announcing a 3.1% increase in its 2019 dividend, TOTAL shares edged down 1% following lower-than-expected earnings number.
BP
Earnings & Revenue: The company reported fourth-quarter adjusted earnings of $1.04 per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items, ahead the Zacks Consensus Estimate of 78 cents and the year-ago quarter’s 64 cents. The London, UK-based company benefited from higher oil equivalent price realizations, ramped-up production from key upstream projects and strength in the fuel marketing businesses.
In the reported quarter, BP’s revenues of $76.9 billion surpassed the Zacks Consensus Estimate of $60.7 billion and was 10% above the fourth-quarter 2017 sales.
Production: The production of oil and natural gas averaged 2,627 MBOE/d (50% liquids), up from last year’s 2,581 MBOE/d.
Free Cash Flow: In the fourth quarter, the company generated around $7.1 billion of cash from operating activities while shelling out $4.4 billion on capital expenditures for free cash flow of $2.7 billion. During the same period, BP paid out around $1.7 billion as dividends to its shareholders and repurchased $16 million worth of shares.
Debt: BP's net debt was $44,144 million at the end of the fourth quarter, higher than $37,819 million a year ago.
Share Price Impact: The company's shares gained 4% as investors were encouraged by the solid quarterly results.
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Exxon Mobil Corporation (XOM): Free Stock Analysis Report
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Royal Dutch Shell PLC (RDS.A): Free Stock Analysis Report
BP p.l.c. (BP): Free Stock Analysis Report
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