Eni (E) Lags on Q4 Earnings, Presents 2023 Share Buyback Plan
Eni SpA E shares declined marginally since it reported lower-than-expected fourth-quarter 2022 earnings.
Eni reported fourth-quarter adjusted earnings from continuing operations of $1.51 per American Depository Receipt (“ADR”), missing the Zacks Consensus Estimate of $2.04. However, the bottom line improved from the year-ago quarter’s $1.33 per ADR.
Total quarterly revenues of $32,205 million increased from $30,965 million a year ago.
Lower-than-expected quarterly earnings resulted from a decline in oil and gas production. The negatives were partially offset by the higher average realized price of liquids and natural gas.
Eni SpA Price, Consensus and EPS Surprise
Eni SpA price-consensus-eps-surprise-chart | Eni SpA Quote
Dividend Hike & Share Buybacks
Eni increased its 2023 annual dividend to €0.94 per share, indicating a 7% hike from 2022. The company also announced a share buyback plan of €2.2 billion for the year. The company intends to return 25-30% of annual cash flow to shareholders through these methods.
Operational Performance
The company operates through four business segments — Exploration & Production, Global Gas & LNG Portfolio, Refining & Marketing and Chemicals, and Plenitude & Power.
Exploration & Production
The total oil and gas production in the fourth quarter was 1,617 thousand barrels of oil equivalent per day (MBoe/d), down 7% from 1,737 MBoe/d recorded in the prior-year quarter.
Liquids production was 776 thousand barrels per day (MBbl/d), down 9% from the year-ago quarter’s 852 MBbl/d. Natural gas production declined 6% year over year to 4,426 million cubic feet per day.
The average realized price of liquids was $77.60 per barrel, up 3% from the $75.58 reported a year ago. The realized natural gas price was $8.72 per thousand cubic feet, up 5% from $8.27 a year ago.
Lower liquid and natural gas production hurt the company’s Exploration & Production segment. The segment reported a profit of €2,891 million, declining from the €3,630 million recorded in the December-end quarter of 2021.
Global Gas & LNG Portfolio
Eni’s worldwide natural gas sales in the December-end quarter were 15.55 billion cubic meters (bcm), down 18% year over year.
The integrated energy major’s Global Gas & LNG Portfolio business segment reported an adjusted operating profit of €67 million, significantly down from the year-ago profit of €536 million. The expected setback in market trends and lower Russia supplies, as well as higher expenses, hurt the segment.
Refining & Marketing and Chemicals
For the December-end quarter, total refinery throughputs were recorded at 6.59 million tons (mmtons), down 5% year over year. Petrochemical product sales declined 31% year over year to 0.77 mmtons in the fourth quarter of 2022.
For the quarter under review, the segment reported an adjusted operating profit of €378 million, turning around from the loss of €104 million in the year-ago quarter primarily due to increased production in the Refining and Marketing segment.
Plenitude & Power
Retail gas sales managed by Plenitude declined 29% year over year to 1.86 bcm. Power sales in the open market declined 34% year over year.
From Plenitude & Power, the company reported a profit of €118 million, reflecting a 16% year-over-year increase.
Financials
As of Dec 31, Eni had long-term debt of €19,374 million, and cash and cash equivalents of €10,155 million. Its debt to capitalization was 32.8%.
For the reported quarter, net cash generated by operating activities amounted to €4,593 million. Capital expenditure totaled €2,764 million.
Outlook
For 2023, Eni expects a total hydrocarbon production of 1.63-1.67 MBoe/d, indicating an increase from the 1.61 MBoe/d reported in 2022. The company expects to discover new exploration resources of 700 MBoe this year.
Moreover, the integrated energy major disclosed its capital expenditure guidance of €9.5 billion for the year.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Antero Midstream Corporation AM reported fourth-quarter 2022 adjusted earnings per share of 20 cents, beating the Zacks Consensus Estimate of 17 cents. The strong quarterly results were primarily driven by higher freshwater delivery volumes and increased average freshwater distribution fees.
For 2023, Antero Midstream expects a net income of $340-$380 million, indicating an increase from the $326.2 million reported in 2022.
Nabors Industries Ltd. NBR reported a fourth-quarter 2022 loss of $3.89 per share, wider than the Zacks Consensus Estimate of a loss of $1.06. The underperformance was primarily due to much higher year-over-year total costs and expenses.
Nabors anticipates free cash flow for fiscal 2023 at $400 million. Nabors expects Drilling Solutions’ first-quarter EBITDA to increase 6% over the fourth-quarter reported level. Finally, the adjusted EBITDA for NBR’s Rig Technologies segment is estimated to be in line with the fourth-quarter reported level.
PBF Energy Inc.’s PBF fourth-quarter 2022 earnings of $4.41 per share missed the Zacks Consensus Estimate of earnings of $4.95. Quarterly earnings were primarily driven by lower contributions from the Logistics segment, and higher costs and expenses.
For 2023, PBF Energy’s total refining system throughput is expected to be 935,000-995,000 barrels per day. For the first quarter, the company anticipates throughput volumes of 845,000-905,000 barrels per day.
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