ConocoPhillips (COP) Beats On Q1 Earnings, Lifts Output View

ConocoPhillips (NYSE:COP) reported first-quarter 2018 adjusted earnings of 96 cents per share, beating the Zacks Consensus Estimate of 74 cents. In the prior-year quarter, the company had posted a loss of 14 cents.

Revenues of $8,961 million steered past the Zacks Consensus Estimate of $8,680 million and improved from $7,771 million in the year-ago quarter.

The strong first-quarter results were supported by higher oil and natural gas price realizations.

The company has a strong discipline of returning cash back to shareholders. Through the first quarter, as high as 30% of the company’s operating cashflow has been returned through dividend payments and shares repurchases.

Exploration and Production

Production from continuing operations averaged 1,269 thousand barrels of oil equivalent per day (MBOED) in the quarter, lower than 1,593 MBOED in the year-ago quarter. The decline was led by divestment of assets and decline of field.

Price Realization

Average realized price for oil was $65.49 a barrel, up from $50.97 in the year-earlier quarter. Natural gas liquids were sold at $28.37 a barrel, up from $24.87 in the year-ago quarter. The price of natural gas was $5.13 per thousand cubic feet, up from $3.84 in first-quarter 2017.

Financials

As of Mar 31, 2018, the company had total cash and cash equivalents of $5.2 billion and debt of $17.1 billion, with a debt-to-capitalization ratio of 36%. In the reported quarter, ConocoPhillips generated $2.4 billion in cash from operating activities. Capital expenditures and investments totaled $1.5 billion and dividends payments grossed $338 million.

Total Expenses

Expenses of $7.2 billion in the first quarter contracted from $8 billion in the January-to-March quarter of 2017.

Guidance

ConocoPhillips reiterated its 2018 capital spending at $5.5 billion. For the April-to-June quarter of this year, the company projects production in the range of 1,170-1,210 MBOED.

For 2018, the company’s production projection was raised from 1,195 -1,235 MBOED to 1,200-1,240 MBOED.

Zacks Rank & Stocks to Consider

ConocoPhillips carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy space are Mammoth Energy Services, Inc. (NASDAQ:TUSK) , Baytex Energy Corp. (TO:BTE) and EOG Resources, Inc. (NYSE:EOG) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Mammoth Energy is expected to witness a year-over-year rise of 246.5% in 2018 earnings.

Baytex managed to beat the Zacks Consensus Estimate in each of the last three quarters.

EOG Resources is likely to see year-over-year earnings growth of 317.9% in 2018.

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