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ConocoPhillips (COP) Q3 Earnings Beat on Oil Price, Output
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ConocoPhillips (COP - Free Report) reported third-quarter 2018 adjusted earnings per share of $1.36, beating the Zacks Consensus Estimate of $1.17 and improving significantly from the year-ago 16 cents. The outperformance stems from higher oil realizations and strong volumes from the unconventional assets.
The Houston, TX-based world’s largest independent oil and gas producer’s quarterly revenue – at $10,2 billion – came 41.3% higher than the third-quarter 2017 sales of $5.4 billion and also beat the Zacks Consensus Estimate of $9.5 billion.
ConocoPhillips’ third-quarter total expenses increased 11% from the corresponding period of 2017 to $7.3 billion. Meanwhile, the company received $345 million during the quarter as part of its $2 billion arbitration award with Venezuela's state-run PDVSA.
The production of oil and natural gas averaged 1,261 thousand barrels of oil equivalent per day (64% liquids), up 2.9% from last year and ahead of the Zacks Consensus Estimate of 1,247 thousand barrels of oil equivalent per day. Results were helped by 48% growth in the company’s Big 3 unconventional assets (Eagle Ford, Bakken and Delaware). ConocoPhillips’ production for oil, natural gas liquids (NGLs) and bitumen was 806 thousand barrels per day, while natural gas output came in at 2,732 million cubic feet per day.
The average realized crude oil price during the third quarter was $73.05 per barrel, representing an increase of 47.9% from the year-ago realization of $49.39. Meanwhile, the average realized natural gas price during the September quarter of 2018 was $5.81 per thousand cubic feet, up 41.4% from the year-ago period.
Balance Sheet & Capital Spending
As of Sep 30, 2018, the oil giant, with a market capitalization of around $76 billion, had $3.9 billion in total cash, cash equivalents and restricted cash. The company had long-term debt of nearly $15 billion, representing a debt-to-capitalization ratio of 32%.
In the reported quarter, ConocoPhillips generated $3.4 billion in cash from operating activities. Capital expenditures and investments totaled almost $1.6 billion and dividend payments grossed $334 million.
Guidance
In an attempt to take advantage of higher commodity prices, ConocoPhillips raised its 2018 capital spending projection from $6 billion to $6.1 billion. For the October-to-December quarter of this year, the company projects production in the range of 1,275-1,315 thousand barrels of oil equivalent per day.
Zacks Rank & Stock Picks
ConocoPhillips currently carries a Zacks Rank #2 (Buy), implying that it is expected to perform above the broader U.S. equity market over the next one to three months.
Apart from ConocoPhillips, one can also look at upstream players like Bonanza Creek Energy, Inc. , Magnolia Oil & Gas Corp. (MGY - Free Report) and Murphy Oil Corp. (MUR - Free Report) . All the companies carry a Zacks Rank #1 (Strong Buy).
Murphy Oil’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average positive surprise being 96.5%.
Bonanza Creek’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average positive surprise being 74.9%.
Meanwhile, over 30 days, Magnolia Oil & Gas has seen the Zacks Consensus Estimate for 2018 and 2019 increase 13.3% and 12.5%, to $1.70 and $1.80 per share, respectively.
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ConocoPhillips (COP) Q3 Earnings Beat on Oil Price, Output
ConocoPhillips (COP - Free Report) reported third-quarter 2018 adjusted earnings per share of $1.36, beating the Zacks Consensus Estimate of $1.17 and improving significantly from the year-ago 16 cents. The outperformance stems from higher oil realizations and strong volumes from the unconventional assets.
The Houston, TX-based world’s largest independent oil and gas producer’s quarterly revenue – at $10,2 billion – came 41.3% higher than the third-quarter 2017 sales of $5.4 billion and also beat the Zacks Consensus Estimate of $9.5 billion.
ConocoPhillips’ third-quarter total expenses increased 11% from the corresponding period of 2017 to $7.3 billion. Meanwhile, the company received $345 million during the quarter as part of its $2 billion arbitration award with Venezuela's state-run PDVSA.
ConocoPhillips Price, Consensus and EPS Surprise
ConocoPhillips Price, Consensus and EPS Surprise | ConocoPhillips Quote
Production Growth, Higher Selling Prices
The production of oil and natural gas averaged 1,261 thousand barrels of oil equivalent per day (64% liquids), up 2.9% from last year and ahead of the Zacks Consensus Estimate of 1,247 thousand barrels of oil equivalent per day. Results were helped by 48% growth in the company’s Big 3 unconventional assets (Eagle Ford, Bakken and Delaware). ConocoPhillips’ production for oil, natural gas liquids (NGLs) and bitumen was 806 thousand barrels per day, while natural gas output came in at 2,732 million cubic feet per day.
The average realized crude oil price during the third quarter was $73.05 per barrel, representing an increase of 47.9% from the year-ago realization of $49.39. Meanwhile, the average realized natural gas price during the September quarter of 2018 was $5.81 per thousand cubic feet, up 41.4% from the year-ago period.
Balance Sheet & Capital Spending
As of Sep 30, 2018, the oil giant, with a market capitalization of around $76 billion, had $3.9 billion in total cash, cash equivalents and restricted cash. The company had long-term debt of nearly $15 billion, representing a debt-to-capitalization ratio of 32%.
In the reported quarter, ConocoPhillips generated $3.4 billion in cash from operating activities. Capital expenditures and investments totaled almost $1.6 billion and dividend payments grossed $334 million.
Guidance
In an attempt to take advantage of higher commodity prices, ConocoPhillips raised its 2018 capital spending projection from $6 billion to $6.1 billion. For the October-to-December quarter of this year, the company projects production in the range of 1,275-1,315 thousand barrels of oil equivalent per day.
Zacks Rank & Stock Picks
ConocoPhillips currently carries a Zacks Rank #2 (Buy), implying that it is expected to perform above the broader U.S. equity market over the next one to three months.
Apart from ConocoPhillips, one can also look at upstream players like Bonanza Creek Energy, Inc. , Magnolia Oil & Gas Corp. (MGY - Free Report) and Murphy Oil Corp. (MUR - Free Report) . All the companies carry a Zacks Rank #1 (Strong Buy).
(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)
Murphy Oil’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average positive surprise being 96.5%.
Bonanza Creek’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average positive surprise being 74.9%.
Meanwhile, over 30 days, Magnolia Oil & Gas has seen the Zacks Consensus Estimate for 2018 and 2019 increase 13.3% and 12.5%, to $1.70 and $1.80 per share, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>