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PetroChina (PTR) Pays Big Dividend as Oil Rally Boosts Profit
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PetroChina Co. Ltd. announced 2017 earnings of RMB 22,793 million or RMB 0.12 per diluted share compared with RMB 7,900 million or RMB 0.04 per diluted share a year earlier. Moreover, China’s dominant oil and gas producer’s total revenue for the year jumped 24.7% from 2016 to RMB 2,015,890 million.
The positive comparisons can be primarily attributable to higher oil prices, which helped its exploration and production unit to report a jump in profitability. Interestingly, the company has decided to pay all of its annual profit of RMB 22,793 million as interim dividend to its stockholders – something it did in the first half as well.
PetroChina followed another big energy name from the country — Sinopec — in reporting encouraging results. Sinopec also saw its profit surge as the largest petroleum and petrochemical company in Asia managed to generate strong petrochemical margins.
Following the robust showing, PetroChina has decided to boost 2018 capital expenditure. The group pegged its 2018 capital budget at RMB 225,800 million, up 4.4% from what it invested in 2017 as it focuses to cash in on the recovery in crude prices.
However, the Chinese energy giant’s earnings per ADR came in at $1.90, unable to match the Zacks Consensus Estimate of $2.82 on higher expenses and losses from gas imports.
12-Month Segment Performance
Upstream: PetroChina, one of the world's largest oil company by market value, posted disappointing upstream output during the twelve months ended Dec 31, 2017. In particular, crude oil output – accounting for 61% of the total – fell 3.7% from the year-ago period to 887 million barrels (MMBbl). This was partly offset by marketable natural gas output, which was up 4.5% to 3,423.4 billion cubic feet (Bcf). As a result, PetroChina’s total production of oil and natural gas declined by a marginal 0.6% year over year to 1,457.8 million barrels of oil equivalent.
However, average realized crude oil price during 2017 was $50.64 per barrel, 33.3% higher than the year-ago period. This buoyed the upstream (or exploration & production) segment results, which posted an operating income of RMB 15,475 million compared to a much smaller operating profit of RMB 3,148 million in 2016.
Downstream: The Beijing-based company’s ‘Refining & Chemicals’ business generated an operating income of RMB 39,961 million. This marks a slight increase from the year-earlier period earnings of RMB 39,026 million. The improvement in the downstream division was due to cost control initiatives, higher share of high valued-added chemical products and operational flexibility to adjust to market conditions.
PetroChina’s refinery division processed 1,016.9 MMBbl of crude oil during the twelve-month period, up 6.7% from 2016. The company produced 9.284 million tons of synthetic resin in the period (a rise of 2.3% year over year), besides manufacturing 5.764 million tons of ethylene (up 3.1%). It also produced 92.715 million tons of gasoline, diesel and kerosene during the period against 86.022 million tons a year earlier.
Natural Gas & Pipelines: Revenue rose 19.5% to RMB 295,786 million on higher natural gas sales volumes. Still, PetroChina lost money to the tune of RMB 23,947 million on the sales of imported natural gas and liquefied natural gas (LNG) from Central Asia and Burma. This pulled down the group’s natural gas business’ income to RMB 15,688 million in 2017, a 12.3% decline from the year-earlier profit of RMB 17,885 million.
Marketing: In marketing operations, the state-owned group sold 169.5 million tons of gasoline, diesel and kerosene during Jan–Dec 2017, an increase of 6.5% year over year. Higher volumes were accompanied by improved product prices due to which sales for the division were up 27.6% to RMB 1,660,456 million.
However, a number of adverse factors – spiraling operating expenses and fierce competition – meant that the segment reported a profit of RMB 8,279 million – lower than the prior year’s RMB 11,048 million.
Liquidity & Capital Expenditure
At the end of 2017, the stock’s cash balance was RMB 122,777 million, while cash flow from operating activities was RMB 366,655 million. Capital expenditure for the year was RMB 216,227 million, up 25.4% from the year-ago level.
Based in Midland, TX, Concho Resources is an independent oil and gas exploration and production company with producing properties mainly in the Permian Basin of southeast New Mexico and west Texas. It has a 100% track of outperforming estimates over the last four quarters at an average rate of 48.89%.
Irving, TX-based Pioneer Natural Resources Company is an independent oil and gas exploration and production company, the asset base of which is anchored by the Spraberry oil field located in West Texas, the Hugoton gas field in Southwest Kansas and the West Panhandle gas field in Texas Panhandle. The 2018 Zacks Consensus Estimate for this company is $6.30, representing some 191.7% earnings per share growth over 2017. Next year’s average forecast is $8.44, pointing to another 34.1% growth.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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PetroChina (PTR) Pays Big Dividend as Oil Rally Boosts Profit
PetroChina Co. Ltd. announced 2017 earnings of RMB 22,793 million or RMB 0.12 per diluted share compared with RMB 7,900 million or RMB 0.04 per diluted share a year earlier. Moreover, China’s dominant oil and gas producer’s total revenue for the year jumped 24.7% from 2016 to RMB 2,015,890 million.
The positive comparisons can be primarily attributable to higher oil prices, which helped its exploration and production unit to report a jump in profitability. Interestingly, the company has decided to pay all of its annual profit of RMB 22,793 million as interim dividend to its stockholders – something it did in the first half as well.
PetroChina followed another big energy name from the country — Sinopec — in reporting encouraging results. Sinopec also saw its profit surge as the largest petroleum and petrochemical company in Asia managed to generate strong petrochemical margins.
Following the robust showing, PetroChina has decided to boost 2018 capital expenditure. The group pegged its 2018 capital budget at RMB 225,800 million, up 4.4% from what it invested in 2017 as it focuses to cash in on the recovery in crude prices.
However, the Chinese energy giant’s earnings per ADR came in at $1.90, unable to match the Zacks Consensus Estimate of $2.82 on higher expenses and losses from gas imports.
12-Month Segment Performance
Upstream: PetroChina, one of the world's largest oil company by market value, posted disappointing upstream output during the twelve months ended Dec 31, 2017. In particular, crude oil output – accounting for 61% of the total – fell 3.7% from the year-ago period to 887 million barrels (MMBbl). This was partly offset by marketable natural gas output, which was up 4.5% to 3,423.4 billion cubic feet (Bcf). As a result, PetroChina’s total production of oil and natural gas declined by a marginal 0.6% year over year to 1,457.8 million barrels of oil equivalent.
However, average realized crude oil price during 2017 was $50.64 per barrel, 33.3% higher than the year-ago period. This buoyed the upstream (or exploration & production) segment results, which posted an operating income of RMB 15,475 million compared to a much smaller operating profit of RMB 3,148 million in 2016.
Downstream: The Beijing-based company’s ‘Refining & Chemicals’ business generated an operating income of RMB 39,961 million. This marks a slight increase from the year-earlier period earnings of RMB 39,026 million. The improvement in the downstream division was due to cost control initiatives, higher share of high valued-added chemical products and operational flexibility to adjust to market conditions.
PetroChina’s refinery division processed 1,016.9 MMBbl of crude oil during the twelve-month period, up 6.7% from 2016. The company produced 9.284 million tons of synthetic resin in the period (a rise of 2.3% year over year), besides manufacturing 5.764 million tons of ethylene (up 3.1%). It also produced 92.715 million tons of gasoline, diesel and kerosene during the period against 86.022 million tons a year earlier.
Natural Gas & Pipelines: Revenue rose 19.5% to RMB 295,786 million on higher natural gas sales volumes. Still, PetroChina lost money to the tune of RMB 23,947 million on the sales of imported natural gas and liquefied natural gas (LNG) from Central Asia and Burma. This pulled down the group’s natural gas business’ income to RMB 15,688 million in 2017, a 12.3% decline from the year-earlier profit of RMB 17,885 million.
Marketing: In marketing operations, the state-owned group sold 169.5 million tons of gasoline, diesel and kerosene during Jan–Dec 2017, an increase of 6.5% year over year. Higher volumes were accompanied by improved product prices due to which sales for the division were up 27.6% to RMB 1,660,456 million.
However, a number of adverse factors – spiraling operating expenses and fierce competition – meant that the segment reported a profit of RMB 8,279 million – lower than the prior year’s RMB 11,048 million.
Liquidity & Capital Expenditure
At the end of 2017, the stock’s cash balance was RMB 122,777 million, while cash flow from operating activities was RMB 366,655 million. Capital expenditure for the year was RMB 216,227 million, up 25.4% from the year-ago level.
Zacks Rank & Stock Picks
PetroChina holds a Zacks Rank #2 (Buy).
Apart from PetroChina, one can also look at energy players like Concho Resources Inc. and Pioneer Natural Resources Company (PXD - Free Report) . Both the companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Based in Midland, TX, Concho Resources is an independent oil and gas exploration and production company with producing properties mainly in the Permian Basin of southeast New Mexico and west Texas. It has a 100% track of outperforming estimates over the last four quarters at an average rate of 48.89%.
Irving, TX-based Pioneer Natural Resources Company is an independent oil and gas exploration and production company, the asset base of which is anchored by the Spraberry oil field located in West Texas, the Hugoton gas field in Southwest Kansas and the West Panhandle gas field in Texas Panhandle. The 2018 Zacks Consensus Estimate for this company is $6.30, representing some 191.7% earnings per share growth over 2017. Next year’s average forecast is $8.44, pointing to another 34.1% growth.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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