TOTAL Tops Zacks Estimate

TOTAL SA (TOT - Analyst Report) reported third-quarter earnings of €0.84 per share ($1.20 per share), above the Zacks Consensus Estimate of $1.12 and second-quarter profit of €0.77. However, earnings declined from €1.81 reported a year ago. Earnings improved sequentially based on higher production, better realizations and lower costs.
 
Total revenues declined 31% from the year-ago quarter but improved 7% sequentially to €33.6 billion. The decline was caused mainly by lower realized oil and gas prices in the Upstream segment, reduced throughput volumes in the Downstream segment and a revenue decline at the chemicals segment.
 
Total hydrocarbon production averaged 2,243 thousand barrels of oil equivalent (MBOE) per day, up 0.5% from last year and 2.8% from the previous quarter. The increase was mainly due to production improvements and start-ups of new fields; offset by OPEC reductions and lower gas demand, disruptions in Nigeria, and changes in portfolio essentially in Venezuela and Libya.
 
Liquids and gas production averaged 1,379 thousand barrels (MBbls) per day (down 2%) and 4,726 thousand cubic feet (Mcf) per day, respectively. Realized hydrocarbon prices declined 40% year over year in the quarter, with liquids and gas realizations down 40% and 39%, respectively. However, total hydrocarbon realizations improved 15% sequentially.
 
Total refinery throughput was 2,142 MBbls per day, down 10% year over year and 2% sequentially, driven by scheduled refinery turnarounds and voluntary throughput reductions to adjust to the economic environment. Crude and other feedstock based utilization rates in the quarter declined to 82% from 92% last year.
 
Chemicals revenues declined 28% from the year ago quarter to €3.9 billion, driven by weaker chemicals demand in Europe and North America, offset by improved margins for petrochemicals.
 
In the reported quarter, TOTAL generated net cash flow of $3 billion and reduced its net debt-to-equity ratio to 21% from 25% at the end of the previous quarter. Net investments declined 12% from last year to $3,503 million, including acquisitions worth $83 million (down 87%) and asset sales of $1,004 million (up 27%). At quarter-end, TOTAL had €13,775 million of cash and cash equivalents.

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