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Eni's (E) Q1 Earnings Miss Estimates, Revenues Increase Y/Y

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Eni SpA (E - Free Report) reported first-quarter 2019 adjusted earnings from continuing operations of 67 cents per American Depository Receipt/ADR, lagging the Zacks Consensus Estimate of 76 cents. Lower oil equivalent production attributed to the underperformance.

The bottom line came almost in line with the year-ago figure of 66 cents, thanks to higher natural gas price realizations.

Total revenues in the quarter were €18,801 million, up from $18,067 million in the year-ago period.

Operational Performance

Total liquids and gas production in the first quarter was 1,832 thousand barrels of oil equivalent per day, down 2% year over year. Termination of production contract at the Intisar gas field in Libya primarily attributed to the downside.

Liquids production was 887 thousand barrels per day (MBbl/d), increasing marginally from the year-ago level of 885 MBbl/d. However, natural gas production fell nearly 4% year over year to 5,157 million cubic feet per day. 

Realized price of liquids was $58.08 per barrel, which fell 5% from the year-ago figure of $61.17. However, realized natural gas price was $5.61 per thousand cubic feet, up 25% from $4.50 in the year-ago quarter.

Gas sales were 21.33 billion cubic meters, down 5% from the year-ago quarter. The decline was caused by lower sales in Italy and the rest of Europe.

Financials

As of Mar 31, the company had a long-term debt (including current portion) of €23.4 billion. Its debt-to-capitalization ratio was 33%.  

In the reported quarter, net cash generated by operating activities amounted to €2.1 billion. Net capital expenditure totaled €1.9 billion.

Outlook

The company expects production growth of hydrocarbon through 2019 to be 2.5%. For 2019, the integrated energy player projects capital budget at €8 billion.

Zacks Rank and Key Picks

Eni currently carries a Zacks Rank #3 (Hold). Meanwhile, some better-ranked players in the energy space are Anadarko Petroleum Corporation , ProPetro Holding Corp. (PUMP - Free Report) and TransCanada Corp. (TRP - Free Report) . While Anadarko sports a Zacks Rank #1 (Strong Buy), ProPetro and TransCanada both hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.    

Anadarko Petroleum delivered average positive earnings surprise of 6.6% in the last four quarters.

The Zacks Consensus Estimate for Midland, TX-based ProPetro’s 2019 earnings is pegged at $2.42, indicating 21% growth from the year-ago reported figure. Next year’s forecast is $2.70, hinting at 11.5% growth.

TransCanada surpassed earnings estimates in the last four quarters, with the average being 19%.

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