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Imperial (IMO) Q4 Earnings Decline Y/Y, Sales Lag Estimates
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Imperial Oil Limited (IMO - Free Report) reported fourth-quarter 2023 adjusted earnings per share of $1.81, lower than the year-ago quarter’s level of $2.11. This underperformance was primarily due to lower price realization.
Revenues of $9.6 billion missed the Zacks Consensus Estimate of $12.3 billion. The top line also declined from the year-ago quarter’s figure of $10.6 billion. This was mainly caused by the weaker performance of IMO’s Downstream and Chemical segments.
Imperial’s board of directors declared a quarterly dividend of 60 Canadian cents per share to its common shareholders of record as of Mar 4, 2024. The payout, which represents a 20% sequential increase, will be made on Apr 1, 2024.
Imperial Oil Limited Price, Consensus and EPS Surprise
Upstream: Revenues of C$4.42 billion increased from C$4.33 billion reported in the prior-year period. The figure missed our projection of C$4.6 billion.
The segment reported a net income of C$770 million compared with C$531 million in the year-ago quarter. The figure beat our estimate of C$626 million.
Net production volume came in at 395,000 barrels of oil equivalent per day (Boe/d) compared with 378,000 Boe/d in the year-ago quarter. Total oil and NGL output was 390,000 barrels per day (bpd) compared with 372,000 bpd in the fourth quarter of 2022.
Oil and NGL output from Kearl and Cold Lake totaled 198,000 bpd and 107,000 bpd, respectively. Syncrude output totaled 80,000 bpd, up from 77,000 bpd reported a year ago. Net natural gas production came in at 29 million cubic feet per day (Mcf/d), lower than 37 Mcf/d in the comparable quarter of 2022.
Bitumen price realizations totaled C$64.05 per barrel compared with C$ 59.85 in the year-ago period. IMO received an average realized price of C$105.37 per barrel for synthetic oil compared with the prior-year quarter’s C$115.22. It received C$33.81 per barrel for conventional crude oil compared with the year-ago quarter’s C$67.91. IMO's average WTI prices fell to C$78.54 per barrel in the reported quarter from C$82.58 in the year-ago period.
Downstream: Revenues of C$14.53 billion were down from C$15.92 billion reported in the fourth quarter of 2022. The figure also missed our anticipation of C$16.58 billion. Net income was C$595 million compared with C$1.12 billion in the year-ago period and the figure beatour estimate of C$516.6 million.
The refinery throughput in the fourth quarter averaged 416,000 bpd, lower than the prior-year level of 426,000 bpd. The capacity utilization was 96% compared with the year-ago level of 100%.
Chemical: Revenues of C$329 million declined from C$422 million in the fourth quarter of 2022. The figure also missed our projection of C$449.3 million.
Segmental net income totaled C$17 million, down from the year-ago quarter’s level of C$41 million. The figure missed our prediction of C$115.3 million.
Total Costs & Capex
Total expenses of C$11.37 billiondeclined from the year-ago quarter’s figure of C$12.17 billion. The figure also fell short of our projection of C$15.26 billion.
In the quarter under consideration, IMO’s capital and exploration expenditures totaled C$469 million, lower than the year-ago quarter’s C$488 million.
Financial Performance
Imperial’s cash flow from operating activities amounted to C$131 billion compared with C$2.8 billion a year ago. Free cash flow totaled C$900 million.
As of Dec 31, 2023, Imperial had cash and cash equivalents of C$864 million. Total debt amounted to C$4.13 billion, with a debt to capitalization of 15.7%.
The company returned C$2.75 billion to its shareholders through dividends in the reported quarter.
Outlook
IMO already disclosed a capital spending budget of C$1.7 billion for 2024. Within its Upstream segment, production is anticipated to be in the range of 420,000-442,000 gross oil-equivalent barrels per day for the same year. Meanwhile, throughput in the Downstream segment is projected to be in the range of 385,000-400,000 barrels per day, accompanied by a capacity utilization rate of 89-92% throughout 2024.
Subsea 7 is valued at $4.04 billion. The company currently pays a dividend of 38 cents per share, or 2.87%, on an annual basis.
SUBCY offers offshore project services for the energy industry, specializing in subsea field development, covering project management, design, engineering, procurement, fabrication, survey, installation and commissioning of seabed production facilities.
Oceaneering International is worth $2.03 billion. In the past year, its shares have risen 3.3%.
The company provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing and entertainment industries worldwide.
Energy Transfer is valued at $45.07 billion. The company currently pays a dividend of $1.25 per share, or 8.72%, on an annual basis.
ET is an independent energy company, principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
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Imperial (IMO) Q4 Earnings Decline Y/Y, Sales Lag Estimates
Imperial Oil Limited (IMO - Free Report) reported fourth-quarter 2023 adjusted earnings per share of $1.81, lower than the year-ago quarter’s level of $2.11. This underperformance was primarily due to lower price realization.
Revenues of $9.6 billion missed the Zacks Consensus Estimate of $12.3 billion. The top line also declined from the year-ago quarter’s figure of $10.6 billion. This was mainly caused by the weaker performance of IMO’s Downstream and Chemical segments.
Imperial’s board of directors declared a quarterly dividend of 60 Canadian cents per share to its common shareholders of record as of Mar 4, 2024. The payout, which represents a 20% sequential increase, will be made on Apr 1, 2024.
Imperial Oil Limited Price, Consensus and EPS Surprise
Imperial Oil Limited price-consensus-eps-surprise-chart | Imperial Oil Limited Quote
Segmental Information
Upstream: Revenues of C$4.42 billion increased from C$4.33 billion reported in the prior-year period. The figure missed our projection of C$4.6 billion.
The segment reported a net income of C$770 million compared with C$531 million in the year-ago quarter. The figure beat our estimate of C$626 million.
Net production volume came in at 395,000 barrels of oil equivalent per day (Boe/d) compared with 378,000 Boe/d in the year-ago quarter. Total oil and NGL output was 390,000 barrels per day (bpd) compared with 372,000 bpd in the fourth quarter of 2022.
Oil and NGL output from Kearl and Cold Lake totaled 198,000 bpd and 107,000 bpd, respectively. Syncrude output totaled 80,000 bpd, up from 77,000 bpd reported a year ago. Net natural gas production came in at 29 million cubic feet per day (Mcf/d), lower than 37 Mcf/d in the comparable quarter of 2022.
Bitumen price realizations totaled C$64.05 per barrel compared with C$ 59.85 in the year-ago period. IMO received an average realized price of C$105.37 per barrel for synthetic oil compared with the prior-year quarter’s C$115.22. It received C$33.81 per barrel for conventional crude oil compared with the year-ago quarter’s C$67.91. IMO's average WTI prices fell to C$78.54 per barrel in the reported quarter from C$82.58 in the year-ago period.
Downstream: Revenues of C$14.53 billion were down from C$15.92 billion reported in the fourth quarter of 2022. The figure also missed our anticipation of C$16.58 billion. Net income was C$595 million compared with C$1.12 billion in the year-ago period and the figure beatour estimate of C$516.6 million.
The refinery throughput in the fourth quarter averaged 416,000 bpd, lower than the prior-year level of 426,000 bpd. The capacity utilization was 96% compared with the year-ago level of 100%.
Chemical: Revenues of C$329 million declined from C$422 million in the fourth quarter of 2022. The figure also missed our projection of C$449.3 million.
Segmental net income totaled C$17 million, down from the year-ago quarter’s level of C$41 million. The figure missed our prediction of C$115.3 million.
Total Costs & Capex
Total expenses of C$11.37 billiondeclined from the year-ago quarter’s figure of C$12.17 billion. The figure also fell short of our projection of C$15.26 billion.
In the quarter under consideration, IMO’s capital and exploration expenditures totaled C$469 million, lower than the year-ago quarter’s C$488 million.
Financial Performance
Imperial’s cash flow from operating activities amounted to C$131 billion compared with C$2.8 billion a year ago. Free cash flow totaled C$900 million.
As of Dec 31, 2023, Imperial had cash and cash equivalents of C$864 million. Total debt amounted to C$4.13 billion, with a debt to capitalization of 15.7%.
The company returned C$2.75 billion to its shareholders through dividends in the reported quarter.
Outlook
IMO already disclosed a capital spending budget of C$1.7 billion for 2024. Within its Upstream segment, production is anticipated to be in the range of 420,000-442,000 gross oil-equivalent barrels per day for the same year. Meanwhile, throughput in the Downstream segment is projected to be in the range of 385,000-400,000 barrels per day, accompanied by a capacity utilization rate of 89-92% throughout 2024.
Zacks Rank and Key Picks
Currently, IMO carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like Subsea 7 S.A. (SUBCY - Free Report) , Oceaneering International, Inc. (OII - Free Report) and Energy Transfer LP (ET - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Subsea 7 is valued at $4.04 billion. The company currently pays a dividend of 38 cents per share, or 2.87%, on an annual basis.
SUBCY offers offshore project services for the energy industry, specializing in subsea field development, covering project management, design, engineering, procurement, fabrication, survey, installation and commissioning of seabed production facilities.
Oceaneering International is worth $2.03 billion. In the past year, its shares have risen 3.3%.
The company provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing and entertainment industries worldwide.
Energy Transfer is valued at $45.07 billion. The company currently pays a dividend of $1.25 per share, or 8.72%, on an annual basis.
ET is an independent energy company, principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.