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TOTAL Misses on Earnings, Revs Drop

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Integrated oil and gas company TOTAL S.A. (TOT - Free Report) reported third-quarter 2013 operating earnings of $1.58 per share (€1.19 per share), 2.5% below the Zacks Consensus Estimate of $1.62. Operating earnings declined 15% from $1.85 (€1.48 per share) reported in the year-ago period.

The decline in earnings was primarily due to lower contribution from the Upstream and Refining and Chemical segments. The contribution from the upstream segment declined primarily due to unfavorable production mix and higher exploration charges,

Total Revenue

Total revenue in the third quarter 2013 was $61.82 billion (€46.69 billion) against $62.37 billion (€49.89 billion) in the third quarter of 2012. The year-over-year decline in revenue was 1%.


Total hydrocarbon production averaged 2,299 thousand barrels of oil equivalent (kboe) per day, up 1% from the year-ago production. The improvement largely stemmed from new projects, productions from Elgin/Franklin in the UK North Sea and from Ibewa in Nigeria. However, security issues in Nigeria and Libya and normal declines were partial offsets.

Liquids production averaged 1,174 thousand barrels (MBbls) per day, down 4% year over year. Lower production in Europe, Africa and South America resulted in the year-over-year decline.  

Gas production was 6,167 thousand cubic feet (Mcf) per day, up 9% year over year. Every region apart from Africa registered an increase in gas production.
Total refinery throughput for the third quarter of 2013 was down 2% year over year to 1,759 MBbls per day. The yearly decline was mainly due to scheduled turnaround at the Lindsey, maintenance of many refineries and closure of the refinery in Rome in the year ago quarter

Realized Price

The realized price for Brent in the third quarter of 2013 was $110.3 per barrel, up 1% from $109.5 per barrel in the third quarter of 2012. The average realized liquid price slid 0.4% year over year to $107.2 per barrel from $107.6 per barrel a year ago.

Realized gas prices for the reported quarter increased 20% year over year to $7.18 per Mbtu from $6.00 Mbtu in the third quarter of 2012. Realized hydrocarbon prices increased 2% to $77.3 per barrel of oil equivalents (boe) from $75.8 in the third quarter of 2012.

Financial Update

Cash and cash equivalents of TOTAL as of Sep 30, 2013, were $20.13 billion (€14.89 billion) versus $21.64 billion (€16.83 billion) as of Sep 30, 2012.

The net debt-to-equity ratio was 20.3% on Sep 30, 2013 versus 21.2% on Sep 30, 2012.

TOTAL’s cash flow from operation in the third quarter 2013 was $9.21 billion (€6.95 billion), up 43% from $6.46 billion (€5.16 billion) in the comparable period last year.

Dividend Update

On Oct 30, 2013, the board of directors of TOTAL approved a third quarter dividend of €0.59 per share to be paid on Mar 27, 2014.

Sale and Purchase of Assets

During third quarter 2013, TOTAL made acquisitions worth $742 million (€549 million). It primarily paid for exploration license in South Africa and Brazil and the carry on the Utica gas and condensate field in the United States.

In the reported quarter, TOTAL disposed of assets worth $2.499 billion (€1.849 billion) comprising mainly the sale of TIGF in France and exploration and production assets in Trinidad and Tobago.

TOTAL’s net investment in the third quarter of 2013 was $6.6 billion (€5.0 billion), up 8.2% from $6.1 billion (€4.9 billion) in the third quarter of 2012.

Other Company Releases

Statoil ASA reported third quarter earnings of 63 cents per share, up 6.8% from the Zacks Consensus Estimate.

ExxonMobil Corp. (XOM - Free Report) posted third-quarter 2013 earnings of $1.79 per share, beating the Zacks Consensus Estimate of $1.77.

BP plc (BP - Free Report) reported third quarter 2013 adjusted earnings per share of $1.17, surpassing the Zacks Consensus Estimate of 97 cents.

Our Take

The startup of Kashagan field in Kazakhstan and the Ekofisk South filed in Norwegian North Sea as well as the launch of Fort Hills mining project in Canada, among many others, were the key highlights of the quarter. These developments are expected to add momentum to TOTAL’s growth story going forward. Moreover, acquiring 20% stake in the Libra oilfield in Brazil added another feather to its cap.

TOTAL with its assets spread worldwide has numerous projects in various stages of development. These projects are scheduled to come online in the next few years, which will further strengthen the position of this oil and gas major.

France-based TOTAL is one of the largest publicly traded, globally integrated oil and gas companies based on production volumes, proven reserves and market capitalization. The company has exploration and production operations across five continents. TOTAL S.A. retains a Zacks Rank #3 (Hold).

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