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Eni (E) Stock Declines 2.1% Despite Posting Q1 Earnings Beat

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Eni SpA (E - Free Report) shares have declined 2.1% despite reporting strong results for the first quarter of 2022.

Despite the strong first-quarter results, the stock’s underperformance is expected to have resulted from the declining fundamentals of the company due to the year-over-year decline in production and profitability.

Eni reported first-quarter 2022 adjusted earnings from continuing operations of $2.04 per American Depository Receipt (ADR), beating the Zacks Consensus Estimate of $1.56. The bottom line significantly improved from the year-ago quarter’s 10 cents per ADR.

Total revenues in the quarter were $33,794 million, up from $17,839 million a year ago.

The strong quarterly results were attributed to higher realizations of average liquids and natural gas prices.

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 Plenitude & Power.

Exploration & Production

Total oil and gas production in the first quarter was 1,654 thousand barrels of oil equivalent per day, down 3% year over year.

Liquids production was 780 thousand barrels per day (MBbl/d), down 4% from the year-ago level of 814 MBbl/d. Natural gas production dropped 2% year over year to 4,638 million cubic feet per day.

The average realized price of liquids was $93.86 per barrel, up 64% from $57.23 reported a year ago. Realized natural gas price was $10.69 per thousand cubic feet, up 135% from $4.55 a year ago.

Higher realizations of average liquids and natural gas prices aided the company’s Exploration & Production segment. The segment reported a profit of €4,381 million, which skyrocketed from €1,378 million recorded in the March-end quarter of 2021.

Global Gas & LNG Portfolio

Eni’s worldwide sales of natural gas for the March-end quarter were recorded at 18.26 billion cubic meters (bcm), up 4% year over year.

The integrated energy major’s Global Gas & LNG Portfolio business segment reported an adjusted operating profit of €931 million, turning around from the year-ago loss of €30 million. Higher sales volumes and the continuous initiatives of portfolio optimization aided the segment.

Refining & Marketing and Chemicals

For the March-end quarter, total refinery throughputs were recorded at 6.07 million tons (mmtons), down 5% year over year. Petrochemical product sales declined 4% year over year to 1.13 mmtons for the first quarter of 2022.

For the quarter under review, the segment reported an adjusted loss of €91 million, narrower than the loss of €120 million in the year-ago quarter primarily due to higher production in the Refining and Marketing segment.

Plenitude & Power

Retail gas sales, managed by Plenitude, declined 3% year over year to 3.42 bcm. Power sales in the open market declined 11% year over year.

Overall, from Plenitude & Power, the company reported a profit of €185 million, reflecting an 8% year-over-year decline.

Financials

As of Mar 31, Eni had long-term debt of €23,131 million, and cash and cash equivalents of €13,464 million. Its debt to capitalization was 38.7%.

For the reported quarter, net cash generated by operating activities amounted to €3,098 million. Capital expenditure totaled €1,364 million.

Outlook

For 2022, Eni expects total hydrocarbon production of 1.7 million boe/d. The company projects its 2022 cash flow from operations, before changes in working capital at replacement cost, to grow to €16 billion. 

Moreover, the integrated energy major projects its organic capital expenditure for the year at €8 billion.

Zacks Rank & Other Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at the following stocks that reported solid first-quarter earnings numbers and presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hess Corporation (HES - Free Report) reported first-quarter 2022 earnings per share of $1.30, beating the Zacks Consensus Estimate of $1.12. The higher commodity price realizations backed the strong quarterly results.

As of Mar 31, 2022, Hess had $1,370 million in cash and cash equivalents. Its long-term debt was recorded at $7,934 million at the first-quarter end. The current maturity of the long-term debt is $22 million.

EOG Resources, Inc. (EOG - Free Report) reported first-quarter 2022 adjusted earnings per share of $4.00, beating the Zacks Consensus Estimate of $3.69. Strong earnings were driven by higher oil equivalent production and commodity prices.

As of Mar 31, EOG Resources had cash and cash equivalents of $4,009 million. Long-term debt was $3,816 million. EOG announced a special dividend of $1.80 per share. The special dividend is likely to be paid out on Jun 30 to stockholders of record as of Jun 15.

Equinor ASA (EQNR - Free Report) reported first-quarter adjusted earnings per share of $1.60, beating the Zacks Consensus Estimate of $1.57. The strong quarterly results were aided by higher commodity prices and increased contributions from the Martin Linge oil field.

As of Mar 31, 2022, Equinor reported $20,882 million in cash and cash equivalents. The company’s long-term debt was $27,493 million at the first-quarter end.


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Hess Corporation (HES) - free report >>

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Equinor ASA (EQNR) - free report >>