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Eni (E) Posts Wider-than-Expected Q3 Loss; Retains View
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Eni SpA (E - Free Report) reported third-quarter 2016 adjusted loss from continuing operations of 31 cents per American Depository Receipt/ADR, substantially wider than the Zacks Consensus Estimate of loss of 9 cents and the year-earlier quarter loss of 16 cents. The underperformance mainly stemmed from lower gas sales and weak commodity prices.
Operational Performance
Total liquids and gas production in the third quarter was 1,710 thousand barrels of oil equivalent per day (MBoe/d), up 0.4% year over year.
Liquids production was 864 thousand barrels per day (MBbl/d), down 0.5% from the year-ago level of 868 MBbl/d. However, natural gas production inched up 0.8% year over year to 4,616 million cubic feet per day (MMcf/d).
Realized price of oil was $40.82 per barrel, down 7.2% from the year-ago realized price of $43.97 per barrel. Realized natural gas price was $3.14 per thousand cubic feet (kcf), down 29.4% from $4.45 in the year-ago comparable quarter.
Gas sales were 20.01 billion cubic meters (Bcm), down 2.3% from the year-ago quarter due to lower spot sales in Germany, Austria and Benelux.
Financials
As of Sep 30, 2016, the company had long-term debt (including current portions) of €22.9 billion. The debt-to-capitalization ratio was 34.8%.
In the reported quarter, net cash generated by operating activities from continuing operations amounted to €1.3 billion. Capital expenditure totaled €2.1 billion.
Outlook
Eni expects 2016 oil and natural gas production to remain flat year over year. This was owing to new field start-ups and ramp-ups.
The company expects gas sales to decrease because of an estimated reduction in the contractual minimum take of supply contracts.
Eni expects its refinery intakes to fall year over year. This does not include the impact of the disposal of the company’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 the 2015 level.
Eni currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Ultra Petroleum Corp. , EQT Midstream Partners, LP and Helix Energy Solutions Group, Inc. (HLX - Free Report) .
EQT Midstream is projected to witness year-over-year earnings growth of almost 12% for the current year. It has a Zacks Rank #2 (Buy).
Helix Energy posted an average positive earnings surprise of 56.42% in the last four quarters. The company has a Zacks Rank #2.
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Eni (E) Posts Wider-than-Expected Q3 Loss; Retains View
Eni SpA (E - Free Report) reported third-quarter 2016 adjusted loss from continuing operations of 31 cents per American Depository Receipt/ADR, substantially wider than the Zacks Consensus Estimate of loss of 9 cents and the year-earlier quarter loss of 16 cents. The underperformance mainly stemmed from lower gas sales and weak commodity prices.
Operational Performance
Total liquids and gas production in the third quarter was 1,710 thousand barrels of oil equivalent per day (MBoe/d), up 0.4% year over year.
Liquids production was 864 thousand barrels per day (MBbl/d), down 0.5% from the year-ago level of 868 MBbl/d. However, natural gas production inched up 0.8% year over year to 4,616 million cubic feet per day (MMcf/d).
Realized price of oil was $40.82 per barrel, down 7.2% from the year-ago realized price of $43.97 per barrel. Realized natural gas price was $3.14 per thousand cubic feet (kcf), down 29.4% from $4.45 in the year-ago comparable quarter.
Gas sales were 20.01 billion cubic meters (Bcm), down 2.3% from the year-ago quarter due to lower spot sales in Germany, Austria and Benelux.
Financials
As of Sep 30, 2016, the company had long-term debt (including current portions) of €22.9 billion. The debt-to-capitalization ratio was 34.8%.
In the reported quarter, net cash generated by operating activities from continuing operations amounted to €1.3 billion. Capital expenditure totaled €2.1 billion.
Outlook
Eni expects 2016 oil and natural gas production to remain flat year over year. This was owing to new field start-ups and ramp-ups.
The company expects gas sales to decrease because of an estimated reduction in the contractual minimum take of supply contracts.
Eni expects its refinery intakes to fall year over year. This does not include the impact of the disposal of the company’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 the 2015 level.
ENI SPA-ADR Price, Consensus and EPS Surprise
ENI SPA-ADR Price, Consensus and EPS Surprise | ENI SPA-ADR Quote
Zacks Rank and Key Stock Picks
Eni currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Ultra Petroleum Corp. , EQT Midstream Partners, LP and Helix Energy Solutions Group, Inc. (HLX - Free Report) .
Ultra Petroleum is likely to witness year-over-year earnings growth of 351.6% in the current year. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EQT Midstream is projected to witness year-over-year earnings growth of almost 12% for the current year. It has a Zacks Rank #2 (Buy).
Helix Energy posted an average positive earnings surprise of 56.42% in the last four quarters. The company has a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>