Imperial Oil (IMO) Q1 Earnings & Revenues Beat Estimates
Imperial Oil IMO reported first-quarter 2022 adjusted earnings per share of $1.38, beating the Zacks Consensus Estimate of $1.35, largely due to the lifting of pandemic restrictions and the further strengthening of commodity prices. Moreover, the bottom line improved significantly from the year-ago quarter’s profit of 42 cents due to higher realizations.
The Canadian integrated oil and gas player’s quarterly revenues of $10 billion outperformed the Zacks Consensus Estimate of $9.06 billion. The top line also rose from the year-ago quarter’s sales of $5.53 billion.
Imperial Oil paid out its increased first-quarter 2022 dividend of 34 Canadian cents per share on Apr 1, up from the 22 Canadian cents paid in the first quarter of 2021.
Segmental Information
Upstream: Revenues of C$4,534 million increased from the prior-year level of C$3,493 million. The segment reported a net income of C$782 million, more than a net income of C$79 million in the year-ago quarter. This upside was attributable to higher price realizations, driven primarily by increased demand and supply-chain constraints.
Net production volumes during the quarter under review averaged 319,000 barrels of oil equivalent per day (Boe/d), down from 393,000 Boe/d in the year-ago quarter. The total oil and NGL output amounted to 362,000 barrels per day (bpd) compared with 410,000 bpd in the first quarter of 2021. Net oil and NGL output from Kearl and Cold Lake totaled 123,000 bpd and 107,000 bpd, respectively. Syncrude output averaged 59,000 bpd, down from the year-earlier quarter’s level of 74,000 bpd. Net natural gas production came in at 107 million cubic feet per day (Mcf/d), lower than 127 Mcf/d in the comparable quarter of the last year.
Bitumen price realizations totaled C$89.36 a barrel, up from C$47.19 in the year-ago quarter. IMO received an average realized price of C$117.24 per barrel of synthetic oil compared with the year-ago quarter’s C$67.41. For conventional crude oil, it received C$98.38 per barrel compared with the year-ago quarter’s C$49.54. The price of NGL increased to C$59.27 a barrel, while the same for gas rose to C$5.08 per thousand cubic feet year over year.
Downstream: Revenues of C$14,045 million were up massively from C$5,305 million in the first quarter of 2021. Moreover, the segment earned a net income of C$389 million compared with C$292 million reported in the year-ago quarter, attributable to the strong margins of about $70 million, showing enhanced product demand.
The refinery throughput in the first quarter averaged 399,000 bpd, higher than the prior-year quarter’s level of 364,000 bpd. The capacity utilization of 93% compared favorably with the year-earlier level of 85%. This outperformance was due to increased demand, reflecting reduced effects related to the pandemic.
Chemical: Revenues of C$471 million rose from C$376 million in the first quarter of 2021. The net income for this segment was recorded at C$56 million, down from the year-ago quarter’s tally of C$67 million.
Imperial Oil Limited Price, Consensus and EPS Surprise
Imperial Oil Limited price-consensus-eps-surprise-chart | Imperial Oil Limited Quote
Total Costs & Capex
Total expenses of C$11,152 million increased from the year-ago quarter’s C$6,486 million.
In the quarter under consideration, Imperial Oil’s capital and exploration expenditures summed at C$296 million, up from the year-ago quarter’s C$163 million.
Financial Performance
Imperial Oil’s cash flow from the operating activities was C$1.91 billion in the reported quarter, the highest in more than 30 years. However, in the year-ago period, the cash flow from the operating activities came in at C$1.04 billion. Meanwhile, IMO’s free cash flow during the first quarter of 2022 totaled C$1.6 billion.
The company returned C$185 million to its shareholders through dividends in the reported quarter.
As of Mar 31, Imperial Oil held C$3.15 billion of cash and cash equivalents. Its total debt amounted to C$5,171 million.
Outlook
For 2022, Imperial oil expects relatively low cash tax payments.
The capital expenditure for the full year is anticipated to be around C$1.4 billion.
Zacks Rank & Other Key Picks
Imperial Oil currently sports a Zacks Rank #1 (Strong Buy). Other players from the energy space include Canadian Natural CNQ, Cenovus Energy CVE and Ranger Oil ROCC, each sporting a similar Zacks Rank. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Canadian Natural’s 2022 earnings has been revised upward by about 47.2% over the past 60 days from $5.84 to $8.6 per share. Canadian Natural’s stock has increased 101.4% in a year.
The Zacks Consensus Estimate for CNQ’s 2022 earnings is projected at $8.60 per share, up about 72.3% from the projected year-ago earnings of $4.99.
The Zacks Consensus Estimate for Cenovus Energy’s 2022 earnings is pegged at $2.62 per share, up 223.5% from the projected year-ago earnings of 81 cents.
Cenovus Energy’s stock has rallied 129.8% in a year. The Zacks Consensus Estimate for CVE’s 2022 earnings has been revised 48% upward over the past 60 days.
The Zacks Consensus Estimate for Ranger Oil’s 2022 earnings is projected at $11.07 per share, which is an increase of 102% from the projected year-ago earnings of $5.48.
Ranger Oil beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being around 27.3%. ROCC stock has increased 127.9% in a year.
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