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TOTAL (TOT) Q2 Earnings Surpass Estimates, Sales Drop Y/Y

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TOTAL SE (TOT - Free Report) reported second-quarter 2020 operating earnings of 2 cents (€0.02) per share against the Zacks Consensus Estimate of a loss of 24 cents.

However, the bottom line declined 98.1% from the year-ago figure of $1.05 (€0.94) per share. This year-over-year decline was due to substantial fall in commodity prices and drop in production.

Total Revenues

Total revenues came in at $25.73 billion, down 49.8% from $51.2 billion generated in the year-ago quarter.

TOTAL S.A. Price, Consensus and EPS Surprise

TOTAL S.A. Price, Consensus and EPS Surprise

TOTAL S.A. price-consensus-eps-surprise-chart | TOTAL S.A. Quote

Production

Total second-quarter hydrocarbon production averaged 2,846 thousand barrels of oil equivalent per day (kboe/d), down 4% year over year. This was due to fall in gas demand due to the coronavirus pandemic, a natural decline in production fields and reduction of output from OPEC+ countries, offset by contribution from new startups.

For the reported quarter, liquids production averaged 1,553 thousand barrels per day, down 4% from the year-ago period.

Quarterly gas production was 7,045 thousand cubic feet per day, down 4% year over year due to decreased gas output from all production areas.

Realized Price

Second-quarter realized price for Brent was down 57% to $29.6 per barrel from $68.9 in the year-ago period. The average realized liquid price was $23.4 per barrel, down 63% from the year-ago figure.

Realized gas prices decreased 32% from the prior-year quarter to $2.61 per thousand British thermal units.

Highlights of the Release

Operating income was $821 million, down 77% from the year-ago period. Lower year-over-year contribution from all segments impacted the company’s performance.

Interest expenses for the reported quarter were $530 million, down 6.7% from $568 million in the year-ago period.

In first-half 2020, TOTAL acquired $2.5 billion worth of assets and sold assets valued at $678 million.

Segment Details

Exploration & Production’s operating loss was $209 million against operating income of $2,022 million in second-quarter 2019.

Integrated Gas, Renewable & Power’s operating income was $326 million, down 24% from $913 million in the year-ago quarter.

Refining & Chemicals’ operating income was $575 million, down 20% from $715 million in the year-ago quarter.

Marketing & Services’ operating income was $129 million, down 70% from $423 million in second-quarter 2019.

Financial Update

Cash and cash equivalents as of Jun 30, 2020 were $29.7 billion compared with $27.4 billion at 2019-end. Net debt to capital was 23.6% at quarter-end, up from 20.7% at 2019-end.

Due to a sharp drop in second-quarter commodity prices, cash flow of the company decreased roughly 52% year over year to $3.5 billion.

2020 Guidance

TOTAL now expects 2020 production in the range of 290,000-295,000 barrels of oil equivalent per day, taking into consideration OPEC+ quotas and the present situation in Libya.

Given the unprecedented drop in oil prices and global demand for commodities, the company decided to preserve liquidity by cutting down planned capital expenditure by at least 25% for 2020. TOTAL now aims to invest $14 billion in 2020. Management aims to lower operating costs by $1 billion from 2019 levels by implementing cost-saving measures.

Zacks Rank

Currently, TOTAL carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming  Releases

Chevron Corporation (CVX - Free Report) is slated to report second-quarter earnings on Jul 31, 2020. The Zacks Consensus Estimate for the bottom line for the quarter is pegged at a loss of 85 cents per share.

Exxon Mobil Corporation (XOM - Free Report) is slated to report second-quarter earnings on Jul 31, 2020. The Zacks Consensus Estimate for the bottom line for the quarter is pegged at a loss of 63 cents per share.

BP plc (BP - Free Report) is slated to report second-quarter earnings on Aug 4, 2020. The Zacks Consensus Estimate for the bottom line for the quarter is pegged at a loss of 99 cents per share.

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