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Imperial Oil Limited (IMO - Free Report) reported fourth-quarter 2024 adjusted earnings per share of $1.69, which beat the Zacks Consensus Estimate of $1.42. This increase was driven by higher production levels, improved bitumen realizations and a year-over-year decrease in total expenses. However, the bottom line declined from the year-ago quarter’s $1.81 due to declining downstream margins and lower realized synthetic crude prices.
Revenues of $9 billion missed the Zacks Consensus Estimate of $11.2 billion. The top line also decreased from the year-ago quarter’s level of $9.6 billion. This was due to weaker revenue contribution from the Downstream business segment.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
IMO returned C$1,792 million to its shareholders with C$317 million in dividend payments and C$1,475 million of accelerated share repurchases in the fourth quarter.
Imperial Oil Limited Price, Consensus and EPS Surprise
Calgary-based integrated oil and gas company declared a quarterly dividend of 72 cents per share to its shareholders of record at the close of business on March. 5, 2025. The payout, which represents a 20% sequential increase, will be made on April 1, 2025.
On June 24, 2024, the company announced it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid to extend existing share purchase program. This program allowed the company to repurchase up to 26,791,840 common shares between June 29, 2024, and June 28, 2025. The program concluded on Dec. 19, 2024, after the company had purchased the maximum number of shares permitted.
The company achieved an average production of 460,000 gross oil-equivalent barrels per day in the fourth quarter of 2024, the highest quarterly production in more than 30 years when adjusting for the divestment of XTO Energy Canada. This marked an increase from 452,000 barrels per day in fourth-quarter 2023, driven by Grand Rapids.
At Kearl, total gross bitumen production averaged 299,000 barrels per day (212,000 barrels for Imperial's share), compared with 308,000 barrels per day (218,000 barrels for Imperial's share) in the same period in 2023. Gross bitumen production at Cold Lake rose to 157,000 barrels per day from 139,000 barrels per day in fourth-quarter 2023, largely due to Grand Rapids.
The company’s share of gross production from Syncrude averaged 81,000 barrels per day, down from 85,000 barrels per day in the fourth quarter of 2023. On the other hand, petroleum product sales were 458,000 barrels per day, down from 476,000 barrels per day in fourth-quarter 2023, primarily due to lower wholesale volumes.
IMO’s Segmental Information
Upstream: Revenues of C$4.7 billion increased from the prior-year level of C$4.4 billion. The figure also matches our prediction.
The segment reported a net income of C$878 million compared with C$770 million in the year-ago quarter. While average bitumen realizations increased $7.53 per barrel, driven by the narrowing of the WTI/WCS spread and lower diluent costs, this was partially offset by lower marker prices. However, the reported net income figure missed our expectation of C$915 million, due to the decrease of synthetic crude oil realizations to $6.27 per barrel, caused by a weaker WTI and a less favorable Synthetic/WTI spread.
Net production volume was 394,000 barrels of oil equivalent per day (Boe/d) compared with 395,000 Boe/d in the year-ago quarter. Total oil and NGL output amounted to 455,000 barrels per day (bpd) compared with 447,000 bpd in the fourth quarter of 2023. Total crude oil output amounted to 389,000 bpd compared with 390,000 bpd in the fourth quarter of 2023.
Net oil and NGL output from Kearl and Cold Lake totaled 200,000 bpd and 118,000 bpd, respectively. Syncrude output averaged 66,000 bpd, which decreased from the year-ago quarter’s level of 80,000 bpd.
Net natural gas production was 30 million cubic feet per day, flat year over year.
In terms of volume, higher production volumes were largely driven by the Grand Rapids production at Cold Lake. Additionally, higher royalties were a result of the increased prices and volumes, leading to higher royalty payments.
Bitumen price realizations totaled C$71.58 per barrel compared with C$64.05 in the year-ago period. IMO received an average realized price of C$99.10 per barrel for synthetic oil compared with the prior-year quarter’s C$105.37.
For conventional crude oil, it received C$42.73 per barrel compared with C$33.81 in the corresponding period of 2023. The price of natural gas decreased from C$2.3 to C$1.73 per thousand cubic feet year over year.
Downstream: Revenues of C$14.1 billion were down from C$14.5 billion in the prior-year quarter. The figure also missed our expectation of C$14.3 billion.
Net income totaled C$356 million compared with C$595 million in the year-ago period. The figure missed our expectation of C$14.5 million. This shortfall was primarily due to lower margins, which indicate weaker market conditions.
The refinery throughput in the fourth quarter averaged 411,000 bpd, higher than the prior-year quarter’s level of 407,000 bpd. The figure also beat our estimate of 401,000 bpd.
The capacity utilization of 95% was higher than the year-ago level of 94%. The figure also beat our estimate of 93%.
Chemical: Revenues of C$357 million increased from C$329 million in the fourth quarter of 2023. Moreover, the figure beat our prediction of C$324.1 million.
Net income for this segment was C$21 million, up from the year-ago quarter’s level of C$17 million. However, thefigure missed our prediction of C$44.3 million.
Total Costs & Capex of IMO
Total expenses of C$11 billion decreased from the year-ago quarter’s C$11.4 billion. The figure was also lower than our prediction of C$12.2 billion.
In the quarter under review, IMO’s capital and exploration expenditures totaled C$423 million, down from the year-ago quarter’s C$469 million.
Financial Performance of IMO
Cash flow from operating activities was C$1.8 billion compared with C$1.3 billion in the year-ago quarter. As of Dec. 31, Imperial Oil had cash and cash equivalents of C$979 million. Total debt of the company amounted to C$4 billion, with a debt-to-capitalization of 14.6%.
Outlook of IMO
IMO already disclosed a capital spending budget of C$1.9-C$2.1 billion for 2025. Upstream segment’s production is anticipated in the range of 433,000-456,000 gross oil-equivalent barrels per day. The higher volume is driven by continued growth at Kearl, the first full-year contribution from Grand Rapids at Cold Lake and other optimization initiatives.
The Leming redevelopment project, utilizing steam-assisted gravity drainage recovery technology, is expected to start up late in the year, with significant contributions expected in 2026 and beyond. For the full year of 2025, the company anticipates production to be in the range of 280,000-290,000 gross barrels per day (bbl/d), 150,000-160,000 bbl/d and 75,000-80,000 bbl/d at Kearl, Cold Lake and Syncrude, respectively.
Meanwhile, throughput in the Downstream segment is expected in the range of 405,000-415,000 barrels per day, accompanied by a capacity utilization rate of 94-96% for 2025. The company has scheduled turnarounds at all its refineries for 2025, expecting lower impacts on throughput and costs compared with 2024. IMO is focused on strengthening position in Canada’s downstream market by optimizing its coast-to-coast logistics network for efficient product delivery to high-value markets, enhancing refinery flexibility in crude and product slates to improve resiliency and expanding lower-carbon product offerings to better serve customers across the country.
Construction of Canada’s largest renewable diesel facility at the Strathcona refinery is ongoing, with a targeted startup in mid-2025. The Leming SAGD redevelopment project is progressing on schedule, with an expected startup in late 2025. Peak production is anticipated to reach around 9,000 barrels per day.
While we have discussed IMO’s fourth-quarter results in detail, let us take a look at three other key reports of this space.
Oil and gas equipment and services provider Liberty Energy (LBRT - Free Report) reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, attributed to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Another oil and gas equipment and services provider Halliburton Company (HAL - Free Report) posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.
As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.
Energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.
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IMO Q4 Earnings Surpass Estimates, Revenues Lag, Dividend Rises
Imperial Oil Limited (IMO - Free Report) reported fourth-quarter 2024 adjusted earnings per share of $1.69, which beat the Zacks Consensus Estimate of $1.42. This increase was driven by higher production levels, improved bitumen realizations and a year-over-year decrease in total expenses. However, the bottom line declined from the year-ago quarter’s $1.81 due to declining downstream margins and lower realized synthetic crude prices.
Revenues of $9 billion missed the Zacks Consensus Estimate of $11.2 billion. The top line also decreased from the year-ago quarter’s level of $9.6 billion. This was due to weaker revenue contribution from the Downstream business segment.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
IMO returned C$1,792 million to its shareholders with C$317 million in dividend payments and C$1,475 million of accelerated share repurchases in the fourth quarter.
Imperial Oil Limited Price, Consensus and EPS Surprise
Imperial Oil Limited price-consensus-eps-surprise-chart | Imperial Oil Limited Quote
Calgary-based integrated oil and gas company declared a quarterly dividend of 72 cents per share to its shareholders of record at the close of business on March. 5, 2025. The payout, which represents a 20% sequential increase, will be made on April 1, 2025.
On June 24, 2024, the company announced it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid to extend existing share purchase program. This program allowed the company to repurchase up to 26,791,840 common shares between June 29, 2024, and June 28, 2025. The program concluded on Dec. 19, 2024, after the company had purchased the maximum number of shares permitted.
The company achieved an average production of 460,000 gross oil-equivalent barrels per day in the fourth quarter of 2024, the highest quarterly production in more than 30 years when adjusting for the divestment of XTO Energy Canada. This marked an increase from 452,000 barrels per day in fourth-quarter 2023, driven by Grand Rapids.
At Kearl, total gross bitumen production averaged 299,000 barrels per day (212,000 barrels for Imperial's share), compared with 308,000 barrels per day (218,000 barrels for Imperial's share) in the same period in 2023. Gross bitumen production at Cold Lake rose to 157,000 barrels per day from 139,000 barrels per day in fourth-quarter 2023, largely due to Grand Rapids.
The company’s share of gross production from Syncrude averaged 81,000 barrels per day, down from 85,000 barrels per day in the fourth quarter of 2023. On the other hand, petroleum product sales were 458,000 barrels per day, down from 476,000 barrels per day in fourth-quarter 2023, primarily due to lower wholesale volumes.
IMO’s Segmental Information
Upstream: Revenues of C$4.7 billion increased from the prior-year level of C$4.4 billion. The figure also matches our prediction.
The segment reported a net income of C$878 million compared with C$770 million in the year-ago quarter. While average bitumen realizations increased $7.53 per barrel, driven by the narrowing of the WTI/WCS spread and lower diluent costs, this was partially offset by lower marker prices. However, the reported net income figure missed our expectation of C$915 million, due to the decrease of synthetic crude oil realizations to $6.27 per barrel, caused by a weaker WTI and a less favorable Synthetic/WTI spread.
Net production volume was 394,000 barrels of oil equivalent per day (Boe/d) compared with 395,000 Boe/d in the year-ago quarter. Total oil and NGL output amounted to 455,000 barrels per day (bpd) compared with 447,000 bpd in the fourth quarter of 2023. Total crude oil output amounted to 389,000 bpd compared with 390,000 bpd in the fourth quarter of 2023.
Net oil and NGL output from Kearl and Cold Lake totaled 200,000 bpd and 118,000 bpd, respectively. Syncrude output averaged 66,000 bpd, which decreased from the year-ago quarter’s level of 80,000 bpd.
Net natural gas production was 30 million cubic feet per day, flat year over year.
In terms of volume, higher production volumes were largely driven by the Grand Rapids production at Cold Lake. Additionally, higher royalties were a result of the increased prices and volumes, leading to higher royalty payments.
Bitumen price realizations totaled C$71.58 per barrel compared with C$64.05 in the year-ago period. IMO received an average realized price of C$99.10 per barrel for synthetic oil compared with the prior-year quarter’s C$105.37.
For conventional crude oil, it received C$42.73 per barrel compared with C$33.81 in the corresponding period of 2023. The price of natural gas decreased from C$2.3 to C$1.73 per thousand cubic feet year over year.
Downstream: Revenues of C$14.1 billion were down from C$14.5 billion in the prior-year quarter. The figure also missed our expectation of C$14.3 billion.
Net income totaled C$356 million compared with C$595 million in the year-ago period. The figure missed our expectation of C$14.5 million. This shortfall was primarily due to lower margins, which indicate weaker market conditions.
The refinery throughput in the fourth quarter averaged 411,000 bpd, higher than the prior-year quarter’s level of 407,000 bpd. The figure also beat our estimate of 401,000 bpd.
The capacity utilization of 95% was higher than the year-ago level of 94%. The figure also beat our estimate of 93%.
Chemical: Revenues of C$357 million increased from C$329 million in the fourth quarter of 2023. Moreover, the figure beat our prediction of C$324.1 million.
Net income for this segment was C$21 million, up from the year-ago quarter’s level of C$17 million. However, thefigure missed our prediction of C$44.3 million.
Total Costs & Capex of IMO
Total expenses of C$11 billion decreased from the year-ago quarter’s C$11.4 billion. The figure was also lower than our prediction of C$12.2 billion.
In the quarter under review, IMO’s capital and exploration expenditures totaled C$423 million, down from the year-ago quarter’s C$469 million.
Financial Performance of IMO
Cash flow from operating activities was C$1.8 billion compared with C$1.3 billion in the year-ago quarter. As of Dec. 31, Imperial Oil had cash and cash equivalents of C$979 million. Total debt of the company amounted to C$4 billion, with a debt-to-capitalization of 14.6%.
Outlook of IMO
IMO already disclosed a capital spending budget of C$1.9-C$2.1 billion for 2025. Upstream segment’s production is anticipated in the range of 433,000-456,000 gross oil-equivalent barrels per day. The higher volume is driven by continued growth at Kearl, the first full-year contribution from Grand Rapids at Cold Lake and other optimization initiatives.
The Leming redevelopment project, utilizing steam-assisted gravity drainage recovery technology, is expected to start up late in the year, with significant contributions expected in 2026 and beyond. For the full year of 2025, the company anticipates production to be in the range of 280,000-290,000 gross barrels per day (bbl/d), 150,000-160,000 bbl/d and 75,000-80,000 bbl/d at Kearl, Cold Lake and Syncrude, respectively.
Meanwhile, throughput in the Downstream segment is expected in the range of 405,000-415,000 barrels per day, accompanied by a capacity utilization rate of 94-96% for 2025. The company has scheduled turnarounds at all its refineries for 2025, expecting lower impacts on throughput and costs compared with 2024. IMO is focused on strengthening position in Canada’s downstream market by optimizing its coast-to-coast logistics network for efficient product delivery to high-value markets, enhancing refinery flexibility in crude and product slates to improve resiliency and expanding lower-carbon product offerings to better serve customers across the country.
IMO’s Ongoing Projects: Renewable Diesel & SAGD Expansion
Construction of Canada’s largest renewable diesel facility at the Strathcona refinery is ongoing, with a targeted startup in mid-2025. The Leming SAGD redevelopment project is progressing on schedule, with an expected startup in late 2025. Peak production is anticipated to reach around 9,000 barrels per day.
IMO currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Earnings at a Glance
While we have discussed IMO’s fourth-quarter results in detail, let us take a look at three other key reports of this space.
Oil and gas equipment and services provider Liberty Energy (LBRT - Free Report) reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, attributed to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Another oil and gas equipment and services provider Halliburton Company (HAL - Free Report) posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.
As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.
Energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.