We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Eni (E) Incurs Wider-than-Expected Q2 Loss; Revises View
Read MoreHide Full Article
EniSpA (E - Free Report) reported second-quarter 2016 adjusted loss from continuing operations of 27 cents per American Depository Receipt/ADR (€0.12 per share), substantially wider than the Zacks Consensus Estimate of loss of 4 cents. The company posted earnings of 9 cents per ADR (€0.04 per share) in the year-earlier quarter. The year-over-year underperformance was mainly due to low production and gas sales.
Operational Performance
Total liquids and gas production in the second quarter was 1,715 thousand barrels of oil equivalent per day (MBoe/d), down 2.2% year over year.
Liquids production was 852 thousand barrels per day (MBbl/d), down 5.6% from the year-ago level of 903 MBbl/d. Natural gas production inched up 0.7% year over year to 4,709 million cubic feet per day (MMcf/d).
Gas sales were 21.15 billion cubic meters (Bcm), down 5.5% from the year-ago quarter on decreased sales and lower volumes marketed.
Financials
As of Jun 30, 2016, the company had long-term debt (including current portions) of €25.8 billion. The debt-to-capitalization ratio was 33%.
In the reported quarter, net cash generated by operating activities from continuing operations amounted to €1.7 billion. Capital expenditure totaled €2.5 billion.
Outlook
Eni believes that a certain degree of ambiguity still looms with respect to the economic slowdown, particularly in the Euro zone and China. This apart, the volatile market conditions persisting in the industry raise concerns. This Italian oil giant expects the uncertainty to prevail in the European gas, refining and marketing and chemicals sectors going forward.
The company expects 2016 oil and natural gas production to remain flat year over year. Production in the Val d’Agri district will remain suspended till the end of the year and decline of mature fields will further contribute to the downside. However, the company believes that the adversities will likely be offset by new field start-ups and ramp-ups.
The company expects gas sales in 2016 to decrease year over year. This is mainly because of an estimated reduction of the contractual minimum take of supply contracts.
Eni expects its refinery intakes to remain flat year over year. This does not include the impact of the disposal of Eni’s refining capacity in CRC refinery in Czech Republic finalized on Apr 30, 2015.
The company intends to cut its full-year capital spending by 20% from 2015 levels.
Zacks Rank
Eni currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Sasol Ltd (SSL - Free Report) , Murphy USA, Inc. (MUSA - Free Report) and QEP Resources, Inc . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Eni (E) Incurs Wider-than-Expected Q2 Loss; Revises View
EniSpA (E - Free Report) reported second-quarter 2016 adjusted loss from continuing operations of 27 cents per American Depository Receipt/ADR (€0.12 per share), substantially wider than the Zacks Consensus Estimate of loss of 4 cents. The company posted earnings of 9 cents per ADR (€0.04 per share) in the year-earlier quarter. The year-over-year underperformance was mainly due to low production and gas sales.
Operational Performance
Total liquids and gas production in the second quarter was 1,715 thousand barrels of oil equivalent per day (MBoe/d), down 2.2% year over year.
Liquids production was 852 thousand barrels per day (MBbl/d), down 5.6% from the year-ago level of 903 MBbl/d. Natural gas production inched up 0.7% year over year to 4,709 million cubic feet per day (MMcf/d).
ENI SPA-ADR Price, Consensus and EPS Surprise
ENI SPA-ADR Price, Consensus and EPS Surprise | ENI SPA-ADR Quote
Gas sales were 21.15 billion cubic meters (Bcm), down 5.5% from the year-ago quarter on decreased sales and lower volumes marketed.
Financials
As of Jun 30, 2016, the company had long-term debt (including current portions) of €25.8 billion. The debt-to-capitalization ratio was 33%.
In the reported quarter, net cash generated by operating activities from continuing operations amounted to €1.7 billion. Capital expenditure totaled €2.5 billion.
Outlook
Eni believes that a certain degree of ambiguity still looms with respect to the economic slowdown, particularly in the Euro zone and China. This apart, the volatile market conditions persisting in the industry raise concerns. This Italian oil giant expects the uncertainty to prevail in the European gas, refining and marketing and chemicals sectors going forward.
The company expects 2016 oil and natural gas production to remain flat year over year. Production in the Val d’Agri district will remain suspended till the end of the year and decline of mature fields will further contribute to the downside. However, the company believes that the adversities will likely be offset by new field start-ups and ramp-ups.
The company expects gas sales in 2016 to decrease year over year. This is mainly because of an estimated reduction of the contractual minimum take of supply contracts.
Eni expects its refinery intakes to remain flat year over year. This does not include the impact of the disposal of Eni’s refining capacity in CRC refinery in Czech Republic finalized on Apr 30, 2015.
The company intends to cut its full-year capital spending by 20% from 2015 levels.
Zacks Rank
Eni currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Sasol Ltd (SSL - Free Report) , Murphy USA, Inc. (MUSA - Free Report) and QEP Resources, Inc . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>