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Eni (E) Beats on Q4 Earnings, Plans Full Decarbonization

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Eni SpA (E - Free Report) reported fourth-quarter 2020 adjusted earnings from continuing operations of 5 cents per American Depository Receipt (ADR), beating the Zacks Consensus Estimate by a penny. The bottom line, however, declined from the year-ago earnings of 33 cents per ADR.

Total revenues for the quarter totaled $14,237 million, down from $18,226 million a year ago.

The better-than-expected earnings were owing to higher petrochemical product sales, partially offset by lower realization of average liquids and natural gas prices, along with a decline in hydrocarbon production volumes.

Eni SpA Price, Consensus and EPS Surprise

Eni SpA Price, Consensus and EPS Surprise

Eni SpA price-consensus-eps-surprise-chart | Eni SpA Quote

Operational Performance

The company operates through four business segments — Exploration & Production, Global Gas & LNG Portfolio, Refining & Marketing and Chemicals and EGL, and Power & Renewables.

Exploration & Production

Total oil and gas production for the fourth quarter was 1,713 thousand barrels of oil equivalent per day, down 11% year over year.

Liquids production was 809 thousand barrels per day (MBbl/d), down 13% from the year-ago level of 926 MBbl/d. Moreover, natural gas production dropped 11% year over year to 4,800 million cubic feet per day.

Average realized price of liquids was $41.57 per barrel, down 30% from $59.06 reported a year ago. Moreover, realized natural gas price was $3.92 per thousand cubic feet, down 18% from $4.79 a year ago.

Lower realizations of average liquids and natural gas prices, along with a decline in hydrocarbon production volumes hurt the company’s Exploration & Production segment. The segment reported a profit of €802 million, down from €2,051 million recorded in the December quarter of 2019.

Global Gas & LNG Portfolio

Eni’s worldwide sales of natural gas for the December quarter were recorded at 18.57 billion cubic meters (bcm), up 9% year over year.

The integrated energy major’s Global Gas & LNG Portfolio business segment reported adjusted operating loss of €101 million, wider than the year-ago loss of €46 million. The underperformance was owing to an unfavorable trading environment.

Refining & Marketing and Chemicals

For the December quarter, total refinery throughputs were recorded at 6.41 million tonnes (mmtonnes), down 16% year over year. Also, Eni’s wholesale sales in Europe fell 20% year over year to 2.11 mmtonnes. However, petrochemical product sales improved 27% year over year to 1.33 mmtonnes for the fourth quarter of 2020.

For the quarter under review, the segment reported an adjusted loss of €104 million, narrower than the year-ago loss of €161 million, primarily owing to improved petrochemical product sales.

EGL, Power & Renewables

Retail gas sales — managed by Eni gas e luce (EGL) — increased 1% year over year to 2.51 bcm, thanks to a recovery in retail consumption. Moreover, retail power sales improved 11% year over year, thanks to a growing base of retail customers. Notably, EGL is an energy retail company that is controlled entirely by Eni.

Power sales in the open market, under the Power & Renewables business, declined 4% year over year owing to a downturn in economic activities.

Overall, from EGL, Power and Renewables, the company reported a profit of €132 million, reflecting a 15% year-over-year decline.


As of Dec 31, Eni had a long-term debt of €21,895 million, and cash and cash equivalents of €9,413 million. Its debt to capitalization was 41.6%.

For the reported quarter, net cash generated by operating activities amounted to €988 million. Capital expenditure totaled €1,187 million.


From 2021 through 2024, the company expects production to witness a compound annual growth rate of 4%. The integrated energy player is on track with the plan of full decarbonization of products and processes by 2050.

Zacks Rank & Other Key Picks

Eni currently sports a Zacks Rank #1 (Strong Buy). Other prospective players in the energy space include Matador Resources Company (MTDR - Free Report) , Antero Resources Corporation (AR - Free Report) and Diamondback Energy, Inc. (FANG - Free Report) . While Diamondback and Antero Resources carry a Zacks Rank #2 (Buy), Matador sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Matador is likely to see earnings growth of 201.3% in 2021.

Antero Resources has seen upward estimate revisions for 2021 earnings in the past 30 days.

Diamondback is likely to see earnings growth of 55% in 2021.

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