Equinor (EQNR) Tops on Q4 Earnings, Hikes Ordinary Dividend
Equinor ASA EQNR reported fourth-quarter adjusted earnings per share of $1.84, beating the Zacks Consensus Estimate of $1.62. The bottom line improved from the year-ago quarter’s $1.36 per share.
Total quarterly revenues increased to $34,321 million from $32,608 million in the prior-year quarter. However, the top line missed the Zacks Consensus Estimate of $69,472 million.
Strong quarterly earnings were aided by higher daily equity production of liquids and gas.
Equinor ASA Price, Consensus and EPS Surprise
Equinor ASA price-consensus-eps-surprise-chart | Equinor ASA Quote
Dividend Hike & Share Buyback
Equinor’s board increased its ordinary cash dividend to 30 cents per share, up 50% sequentially. This reflects the firm’s strong commitment to returning capital to shareholders.
The company increased the existing share buyback program by up to $4.8 billion, resulting in a program worth up to $6 billion in 2023.
Segmental Analysis
Exploration & Production Norway (E&P Norway): The segment reported adjusted earnings of $14,594 million, declining from $14,809 million in the year-ago quarter. Lower daily production of liquids and gas hurt the segment.
The company’s average daily production of liquids and gas declined 5% year over year to 1,401 thousand barrels of oil equivalent per day (MBoe/d) due to a natural decline and the sale of ownership in Martin Linge.
E&P International: The segment’s adjusted operating profit was $676 million, down from the year-ago quarter’s $689 million. Higher operations and maintenance expenses affected the segment.
The average daily equity production of liquids and gas increased to 343 MBoe/d from 339 MBoe/d in the year-ago quarter. The segment was aided primarily by the resumption of the Peregrino field in Brazil.
E&P USA: Through the segment, Equinor generated an adjusted quarterly profit of $474 million, down from $587 million in the December-end quarter of 2021. The segment was affected by the Gulf of Mexico turnaround and a natural decline from the Appalachia Basin assets.
The integrated firm’s average equity production of liquids and gas was 302 MBoe/d, down from 350 MBoe/d in the year-ago quarter.
Marketing, Midstream & Processing: The segment reported an adjusted loss of $540 million, narrower than the loss of $997 million reported a year ago.
Renewables: The segment reported an adjusted loss of $86 million, wider than a loss of $38 million reported in the year-ago quarter. Lower gas sales volumes primarily hurt the segment.
Free Cash Flow
In the December-end quarter, Equinor generated a free cash flow of $1,669 million, declining from $8,578 million in the year-ago period. The underperformance resulted from declining operating cash flows.
Balance Sheet
As of Dec 31, 2022, Equinor reported $15,579 million in cash and cash equivalents. The company’s long-term debt was $26,551 million at the fourth-quarter end.
Outlook
Equinor kept its production growth expectations at 3% for 2023. The company revealed its organic capital spending budget of $10-11 billion for the year.
For the 2024-2026 period, the oil major expects average organic capital spending of $10-$11 billion per annum.
Zacks Rank & Stocks to Consider
Equinor currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at stocks like RPC Inc. RES and Murphy USA Inc. MUSA, each sporting a Zacks Rank #1 (Strong Buy), and Halliburton Company HAL, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RPC’s adjusted earnings of 41 cents per share in the fourth quarter beat the Zacks Consensus Estimate of 30 cents. The strong quarterly results were backed by higher activity levels in all the service lines and rising equipment utilization.
As of Dec 31, RPC had cash and cash equivalents of $126.4 million, up sequentially from $73.2 million. Nonetheless, the company managed to maintain a debt-free balance sheet.
Murphy USA’s fourth-quarter 2022 earnings per share of $5.21 missed the Zacks Consensus Estimate of $6.16. The underperformance could be attributed to lower-than-expected petroleum product sales.
Murphy USA projects a 2023 fuel volume of 240-245 thousand gallons on an APSM basis. Further, Murphy USA’s 2023 guidance includes up to 45 new stores, up to 30 raze-and-rebuilds, and $795-$815 million in merchandise margin contribution.
Halliburton’s fourth-quarter 2022 adjusted net income per share of 72 cents surpassed the Zacks Consensus Estimate of 67 cents. The outperformance reflects stronger-than-expected profit from both its divisions.
In more good news for investors, Halliburton raised its quarterly dividend by 33.3% to 16 cents per share (or 64 cents per share annualized).
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Equinor ASA (EQNR) : Free Stock Analysis Report
