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PetroChina (PTR) Falls 7.6% Since Posting Lower Q3 Earnings
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The stock of PetroChina Company Limited has lost around 7.6% since its third-quarter earnings announcement on Oct 28, wherein the company reported lower year-over-year bottom-line numbers.
What Did PetroChina’s Earnings Unveil?
PetroChina announced third-quarter 2021 earnings of RMB 22.1 billion or RMB 0.121 per share compared with a profit of RMB 40.1 billion or RMB 0.219 per share a year earlier. Earnings per ADR came in at $1.87. The unfavorable comparison reflected the spin-off of its pipeline and storage assets.
But China’s dominant oil and gas producer’s total revenues for the quarter rose 37.5% from the year-ago period to RMB 683.8 billion due to higher commodity prices and an uptick in sales volumes.
PetroChina Company Limited Price, Consensus and EPS Surprise
Upstream: PetroChina posted slightly lower upstream output during the nine months ended Sep 30, 2021. While crude oil output — accounting for 55% of the total — fell 5.6% from the year-ago period to 662.3 million barrels, marketable natural gas output was up by 6.5% to 3,280.5 billion cubic feet. Due to the resultant effect, the group’s total production of oil and natural gas edged down 0.4% year over year to 1,209.2 million barrels of oil equivalent. Of the total, domestic output contributed 1,084.5 million barrels of oil equivalent (up 3.8% year over year), or roughly 90%. PTR’s oil and gas lifting cost rose 12.8% on a per unit basis compared with the same period of last year.
Notwithstanding the drop in production and higher costs, the upstream (or exploration & production) segment posted an operating income of RMB 58.4 billion, nearly trebling from the year-ago profit of RMB 20 billion. This was primarily on account of sharply higher crude price. In fact, the average realized oil price during the first three quarters of 2021 was $62.66 per barrel, surging 56.4% from the year-ago period.
Downstream: The Beijing-based company’s Refining and Chemicals business recorded an operating income of RMB 32 billion against the year-earlier period’s loss of RMB 1.7 billion. The turnaround in PTR’s downstream division result was due to optimized resource allocation, strict cost control and impressive sales volumes of refined and chemical products.
PetroChina’s refinery division processed 911.9 million barrels of crude oil during the nine-month period, up 3.9% from 2020. The company produced 7,834 thousand tons of synthetic resin in the period (up 2.6% year over year), besides manufacturing 4,756 thousand tons of ethylene (up 0.9%). PetroChina also produced 81,327 thousand tons of gasoline, diesel and kerosene during the period against 80,192 thousand tons a year earlier.
Natural Gas and Pipeline: Higher sales volume and price of natural gas, plus strong domestic market demand supported the Chinese behemoth’s segment earnings. Despite these positives, PTR’s natural gas business earned RMB 36.7 billion in the period under review, down from the year-earlier profit of RMB 57.7 billion. This could be attributed to the profit from pipeline assets restructuring that aided PetroChina’s year-ago earnings in this segment.
Marketing: In marketing operations, the state-owned group sold 123,694 thousand tons of gasoline, diesel and kerosene during the nine-month period, up 2.5% year over year. The effects of higher volumes were magnified by incremental refined products price realizations and robust domestic market consumption. Consequently, PetroChina posted a profit of RMB 8.8 billion compared to a loss of RMB 4.9 billion recorded in the same period last year.
Liquidity & Capital Expenditure
As of Sep 30, the group’s cash balance was RMB 172.6 billion, while cash flow from operating activities for the first nine months of 2021 was RMB 226.7 billion. Capital expenditure for the first three quarters reached RMB 169.4 billion.
Zacks Rank & Other Picks
PetroChina currently carries a Zacks Rank #2 (Buy).
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EOG Resources has a projected earnings growth rate of 491.1% for the current year. The consensus estimate for EOG's current-year earnings has been revised 15.5% upward over the past 60 days.
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PetroChina (PTR) Falls 7.6% Since Posting Lower Q3 Earnings
The stock of PetroChina Company Limited has lost around 7.6% since its third-quarter earnings announcement on Oct 28, wherein the company reported lower year-over-year bottom-line numbers.
What Did PetroChina’s Earnings Unveil?
PetroChina announced third-quarter 2021 earnings of RMB 22.1 billion or RMB 0.121 per share compared with a profit of RMB 40.1 billion or RMB 0.219 per share a year earlier. Earnings per ADR came in at $1.87. The unfavorable comparison reflected the spin-off of its pipeline and storage assets.
But China’s dominant oil and gas producer’s total revenues for the quarter rose 37.5% from the year-ago period to RMB 683.8 billion due to higher commodity prices and an uptick in sales volumes.
PetroChina Company Limited Price, Consensus and EPS Surprise
PetroChina Company Limited price-consensus-eps-surprise-chart | PetroChina Company Limited Quote
Segment Performance
Upstream: PetroChina posted slightly lower upstream output during the nine months ended Sep 30, 2021. While crude oil output — accounting for 55% of the total — fell 5.6% from the year-ago period to 662.3 million barrels, marketable natural gas output was up by 6.5% to 3,280.5 billion cubic feet. Due to the resultant effect, the group’s total production of oil and natural gas edged down 0.4% year over year to 1,209.2 million barrels of oil equivalent. Of the total, domestic output contributed 1,084.5 million barrels of oil equivalent (up 3.8% year over year), or roughly 90%. PTR’s oil and gas lifting cost rose 12.8% on a per unit basis compared with the same period of last year.
Notwithstanding the drop in production and higher costs, the upstream (or exploration & production) segment posted an operating income of RMB 58.4 billion, nearly trebling from the year-ago profit of RMB 20 billion. This was primarily on account of sharply higher crude price. In fact, the average realized oil price during the first three quarters of 2021 was $62.66 per barrel, surging 56.4% from the year-ago period.
Downstream: The Beijing-based company’s Refining and Chemicals business recorded an operating income of RMB 32 billion against the year-earlier period’s loss of RMB 1.7 billion. The turnaround in PTR’s downstream division result was due to optimized resource allocation, strict cost control and impressive sales volumes of refined and chemical products.
PetroChina’s refinery division processed 911.9 million barrels of crude oil during the nine-month period, up 3.9% from 2020. The company produced 7,834 thousand tons of synthetic resin in the period (up 2.6% year over year), besides manufacturing 4,756 thousand tons of ethylene (up 0.9%). PetroChina also produced 81,327 thousand tons of gasoline, diesel and kerosene during the period against 80,192 thousand tons a year earlier.
Natural Gas and Pipeline: Higher sales volume and price of natural gas, plus strong domestic market demand supported the Chinese behemoth’s segment earnings. Despite these positives, PTR’s natural gas business earned RMB 36.7 billion in the period under review, down from the year-earlier profit of RMB 57.7 billion. This could be attributed to the profit from pipeline assets restructuring that aided PetroChina’s year-ago earnings in this segment.
Marketing: In marketing operations, the state-owned group sold 123,694 thousand tons of gasoline, diesel and kerosene during the nine-month period, up 2.5% year over year. The effects of higher volumes were magnified by incremental refined products price realizations and robust domestic market consumption. Consequently, PetroChina posted a profit of RMB 8.8 billion compared to a loss of RMB 4.9 billion recorded in the same period last year.
Liquidity & Capital Expenditure
As of Sep 30, the group’s cash balance was RMB 172.6 billion, while cash flow from operating activities for the first nine months of 2021 was RMB 226.7 billion. Capital expenditure for the first three quarters reached RMB 169.4 billion.
Zacks Rank & Other Picks
PetroChina currently carries a Zacks Rank #2 (Buy).
Apart from PTR, investors interested in the energy sector might look at operators like ConocoPhillips (COP - Free Report) , EOG Resources (EOG - Free Report) and Suncor Energy (SU - Free Report) . All the companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips has a projected earnings growth rate of 710.3% for the current year. The Zacks Consensus Estimate for COP’s current-year earnings has been revised 24.9% upward over the past 60 days.
ConocoPhillips beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 13%. COP shares have gained around 67% in a year.
EOG Resources has a projected earnings growth rate of 491.1% for the current year. The consensus estimate for EOG's current-year earnings has been revised 15.5% upward over the past 60 days.
EOG Resources beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 29.8%. EOG has rallied around 64.9% in a year.
Suncor Energy has an expected earnings growth rate of 318.2% for the current year. The Zacks Consensus Estimate for SU's current-year earnings has been revised 27% upward over the past 60 days.
Suncor Energy beat the Zacks Consensus Estimate for earnings in two of the last four quarters but missed twice. It has a trailing four-quarter earnings surprise of roughly 7.5%, on average. SU has rallied around 44.5% in a year.