TOTAL Misses Earnings and Sales

Zacks

Integrated oil and gas company TOTAL S.A. (TOT) reported second-quarter 2013 operating earnings of $1.55 per share (€1.19 per share), 1.9% below the Zacks Consensus Estimate of $1.58. Operating earnings declined 2% from $1.58 (€1.23 per share) reported in the year-ago period.

The decline in earnings was primarily due to lower contribution from the Upstream and Refining and Chemical segments. The contribution from the upstream segment declined primarily due to lower realized prices of the product sold, while results of Refining and Chemical were impacted by planned maintenance outages.

Total Revenue

Total revenue at the end of second-quarter 2013 was $61.35 billion (€46.97 billion) against $62.96 billion (€49.13 billion) in the second quarter of 2012. The year-over-year decline in revenue was 2.6%.

Production

Total hydrocarbon production averaged 2,290 thousand barrels of oil equivalent (kboe) per day, up 1% from the year-ago production. Output during the quarter was negatively impacted by ongoing security issues in Nigeria, normal declines and maintenance outages. The aforesaid negatives were offset by production from new projects and restart of operation in Elgin in the UK North Sea and from Ibewa in Nigeria.

Liquids production averaged 1,160 thousand barrels (MBbls) per day, down 5% year over year. Lower production in Europe, Africa and South America resulted in the year-over-year decline.  

Gas production was 6,169 thousand cubic feet (Mcf) per day, up 8% year over year. Every region apart from North and South America registered an increase in gas production.
 
Total refinery throughput for the second quarter of 2013 was down 6% year over year to 1,772 MBbls per day. The yearly decline was mainly due to scheduled outages at the Antwerp and Donges refineries.

Realized Price

The realized price for Brent in the second quarter of 2013 was $102.4 per barrel, down 5.1% from $108.3 per barrel in the second quarter of 2012. The average realized liquid price deceased 5% year over year to $96.6 per barrel from $101.6 per barrel a year ago.

Realized gas prices for the reported quarter decreased 7% year over year to $6.62 per Mbtu from $7.10 Mbtu in the second quarter of 2012. Realized hydrocarbon prices decreased 8% to $69.8 per barrel of oil equivalents (boe) from $76.0 in the second quarter of 2012.

Financial Update

Cash and cash equivalents of TOTAL as of Jun 30, 2013, were $15.02 billion (€11.55 billion) versus $19.49 billion (€14.99 billion) as of Jun 30, 2012.

The net debt-to-equity ratio was 27.6% on Jun 30, 2013 versus 21.9% on Jun 30, 2012.

TOTAL’s cash flow from operation in the second quarter 2013 was $4.84 billion (€3.7 billion), down 39% from $7.9 billion (€6.16 billion) in the comparable period last year.

Sale and Purchase of Assets

During second quarter 2013, TOTAL made acquisitions worth $.65 billion (€0.5 billion). The company acquired additional stakes in Novatek, and made payments for exploration permits.  

In the reported quarter, TOTAL disposed of assets worth $1.08 billion (€1.06 billion) comprising mainly the sale of an interest in Tempa Rossa field in Italy.

TOTAL’s net investment in the second quarter of 2013 was $5.7 billion (€4.4 billion), up 11.8% from $5.1 billion (€4 billion) in the second quarter of 2012.

Other Company Releases

Statoil ASA (STO) reported second quarter earnings of 60 cents per share, down 7.69% from the Zacks Consensus Estimate.

ExxonMobil Corp. (XOM) is slated to release its second quarter earnings on Aug 1. The Zacks Consensus Estimate is at $1.89.

BP plc (BP) is slated to release its first quarter earnings today. The Zacks Consensus Estimate is at $1.09.

Our Take

The restart of Elgin/Franklin in the UK and the first cargo from Angola LNG were the key highlights of the quarter. The restructuring program of TOTAL has started to yield positive results. However, it is expected to generate better returns going forward.

TOTAL with its assets spread worldwide has numerous projects in various stages of development. These projects are scheduled to come online in the next few years, which will further strengthen the position of this oil and gas major.

France-based TOTAL is one of the largest publicly traded, globally integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company has exploration and production operations across five continents. TOTAL S.A. retains a Zacks Rank #4 (Sell).
 

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