ConocoPhillips (COP) Tops Q1 Earnings Estimates, Keeps Dividend
ConocoPhillips COP reported first-quarter 2020 adjusted earnings per share of 45 cents, beating the Zacks Consensus Estimate of 21 cents, thanks to a decline in production and operating expenses along with contributions from Lower 48 Big 3 unconventional resources.
However, the bottom line declined from the year-ago figure of $1.00 per share owing to a fall in realized commodity prices.
Based in Houston, TX, the world’s largest independent oil and gas producer’s quarterly revenues of $4,811million declined from first-quarter 2019 sales of $10,057million. Moreover, the figure missed the Zacks Consensus Estimate of $6,552 million.
ConocoPhillips Price, Consensus and EPS Surprise
ConocoPhillips price-consensus-eps-surprise-chart | ConocoPhillips Quote
Maintains Dividend
ConocoPhillips has maintained its quarterly dividend payment at 42 cents per share. The dividend will be paid on Jun 1, to stockholders of record as on May 11. While many leading energy firms are considering a cut in dividend payouts amid the coronavirus outbreak, the company’s decision to maintain dividends is worth appreciating.
Overall Production Falls
Total production averaged 1,289 thousand barrels of oil equivalent per day (MBoE/D), down from the year-ago quarter’s 1,361 MBoE/D. The overall production was lower than the year-ago period, primarily due to normal field decline. Contributions from Lower 48 Big 3 unconventional resources partially offset the negative.
ConocoPhillips’ production of crude oil came in at 654 thousand barrels per day (MBD), lower than the year-ago quarter’s 715 MBD. However, the company’s production of natural gas liquids totaled 123 MBD, higher than the year-ago quarter’s 110 MBD. Bitumen production in the quarter was recorded at 66 MBD, higher than the first-quarter 2019 figure of 63 MBD. But natural gas output came in at 2,674 million cubic feet per day (MMcf/d), lower than the year-ago level of 2,840 MMcf/d.
Realized Prices Decline
The average realized crude oil price during the first quarter was $48.86 per barrel, showing a decline from the year-ago realization of $59.45. Realized natural gas liquids price was recorded at $14.82 per barrel, lower than the year-ago quarter’s $23.85. Average realized natural gas price during first-quarter 2020 was $4.30 per thousand cubic feet, down from the year-ago period’s $6.00. As such, average realized oil equivalent prices fell 23% to $38.81 per barrel from the year-ago level of $50.59.
Total Expenses Fall
ConocoPhillips’ first-quarter total expenses contracted to $6,374 million from $7,370 million in the corresponding period of 2019. Production and operating expenses fell to $1,173 million in the reported quarter from $1,271 million a year ago. However, exploration costs increased to $188 million in first-quarter 2020 from $110 million in the comparable period of 2019.
Balance Sheet & Capital Spending
As of Mar 31, 2020, the oil giant had $3,908 million in total cash and cash equivalents. The company had a total long-term debt of $14,847 million, representing a debt-to-capitalization ratio of 0.32.
Capital expenditures and investments totaled $1,649 million, and dividend payments grossed $458 million. The company repurchased shares worth $726 million in the quarter.
Guidance
Owing to weak commodity prices due to coronavirus pandemic, the upstream energy player has decided to voluntarily curtail production volumes. For the month of May, the company expects gross curtailment of 265 thousand barrels of oil per day (MBbl/D). It projects voluntary gross curtailment for the month of June at 460 MBbl/D.
Zacks Rank & Stocks to Consider
ConocoPhillips currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector includeLilis Energy, Inc. LLEX, CNX Resources Corporation CNX and Comstock Resources, Inc. CRK. While Lilis Energy sports a Zacks Rank #1 (Strong Buy), CNX Resources and Comstock Resources carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lilis Energy has witnessed upward estimate revisions for 2020 bottom line in the past 60 days.
CNX Resources has witnessed upward estimate revisions for 2020 bottom line in the past 60 days.
Comstock has witnessed upward estimate revisions for 2020 bottom line in the past 30 days.
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