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TOTAL (TOT) Q4 Earnings Meet Estimates, Revenues Drop Y/Y

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Zacks Equity Research
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TOTAL SE TOT reported fourth-quarter 2020 operating earnings of 46 cents (€0.39) per share, on par with the Zacks Consensus Estimate.

However, the bottom line declined 61% from the year-ago figure of $1.19 (€1.07) per share. This year-over-year decline was due to substantial fall in commodity prices, drop in production and decline in refining margins.

Total Revenues

Total revenues came in at $37.94 billion, down 23% from $49.28 billion generated in the year-ago quarter.

TOTAL SE Price, Consensus and EPS Surprise

TOTAL SE Price, Consensus and EPS Surprise
TOTAL SE Price, Consensus and EPS Surprise

TOTAL SE price-consensus-eps-surprise-chart | TOTAL SE Quote

Production

Total fourth-quarter hydrocarbon production averaged 2,841 thousand barrels of oil equivalent per day (kboe/d), down 9% year over year. This was due to unplanned outages, particularly in Norway, disruption in Libya, natural decline in production fields and reduction of output from OPEC+ countries, offset by contribution from new startups.

For the reported quarter, liquids production averaged 1,483 thousand barrels per day, down 13% from the year-ago period.

Quarterly gas production was 7,406 thousand cubic feet per day, down 2% year over year due to decreased gas output from Europe and Central Asia region.

Realized Price

Fourth-quarter realized price for Brent was down 29.9% to $44.2 per barrel from $63.1 in the year-ago period. The average realized liquid price was $41 per barrel, down 30.6% from the year-ago figure.

Realized gas prices decreased 12% from the prior-year quarter to $3.31 per thousand British thermal units.

Highlights of the Release

Operating income was $1,824 million, down 53% from the year-ago period due to lower Brent prices, natural gas prices and refining margins.

Interest expenses for the reported quarter were $501 million, down 17.3% from $606 million in the year-ago period.

In 2020, TOTAL acquired $4.2 billion worth of assets and sold assets valued at $1.5 billion.

Courtesy of cost-savings initiatives, the company was able to lower operating costs by $1.1 billion in 2020 from the 2019 level.

Segment Details

Exploration & Production’s operating earnings were $1,068 million, down 47% year over year.

Integrated Gas, Renewable & Power’s operating income was $254 million, down 68% from $794 million in the year-ago quarter.

Refining & Chemicals’ operating income was $170 million, down 71% from $580 million in the year-ago quarter.

Marketing & Services’ operating income was $332 million, down 30% from $474 million in fourth-quarter 2019.

Financial Update

Cash and cash equivalents as of Dec 31, 2020 were $31.3 billion compared with $27.4 billion at 2019-end. Net debt to capital was 25.9% at quarter-end, up from 20.7% at 2019-end.

Cash flow from operating activities at fourth quarter-end was $3,046 million, down 28% year over year.

2021 Guidance

TOTAL expects LNG sales to improve 10% in 2021 from 2020 levels, primarily due to ramp up of Cameron LNG.

Management continues with cost-saving initiatives and targets additional savings of $0.5 billion in 2021, indicating a decline from $1.1 billion in 2020.

TOTAL plans to allocate 20% of net investment in 2021 toward expanding the Renewables and Electricity business. The company aims to install and operate 35 GW of renewable assets by 2025.

Zacks Rank

Currently, TOTAL carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

Royal Dutch Shell RDS.A reported fourth-quarter earnings of 10 cents, missing the Zacks Consensus Estimate of 17 cents by 41.2%.

BP plc BP reported fourth-quarter earnings of 3 cents, missing the Zacks Consensus Estimate of 12 cents by 75%.

Chevron Corporation CVX reported a loss of 1 cent for the fourth quarter against the Zacks Consensus Estimate of earnings of 8 cents in the year-ago period.

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