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TOTAL (TOT) Q4 Earnings Beat on Solid Support From Startups

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TOTAL S.A. (TOT - Free Report) reported fourth-quarter 2019 operating earnings of $1.19 per share (€1.07 per share), beating the Zacks Consensus Estimate of $1.01 by 17.8%.

The bottom line also improved 1% from the year-ago figure of $1.17 per share (€1.02 per share). This year-over-year increase was due to rise in production volumes, marginally offset by softness in the prices of commodities compared with the previous year.

Total Revenues

Total revenues came in at $49.29 billion, down 6.1% from $52.49 billion generated in the year-ago quarter.

TOTAL S.A. Price, Consensus and EPS Surprise

TOTAL S.A. Price, Consensus and EPS Surprise

TOTAL S.A. price-consensus-eps-surprise-chart | TOTAL S.A. Quote


Total hydrocarbon production during the fourth quarter averaged 3,113 thousand barrels of oil equivalent per day, up 8% year over year. The increase was due to higher contribution from Egina in Nigeria, Kaombo in Angola, Ichthys in Australia, Culzean in the United Kingdom, Yamal LNG in Russia and Johan Sverdrup in Norway.

In the reported quarter, liquids production averaged 1,714 thousand barrels per day, increasing 8% from the year-ago period.

Gas production during the quarter was 7,263 thousand cubic feet per day, up 4% year over year. Increased production in Africa, Europe and Central Asia East was partially offset by soft output from the Asia Pacific region.

Realized Price

In the fourth quarter, realized price for Brent was down 8% to $63.1 per barrel from $68.8 in the year-ago period. The average realized liquid price was $59.1 per barrel, in line with the year-ago figure.

Realized gas prices decreased 25% from the prior-year quarter to $3.76 per thousand British thermal units.

Substantial decline in hydrocarbon prices did not allow the company to enjoy the full benefits from increase in total production.
Highlights of the Release

Operating income was $3,879 million, nearly in line with the year-ago period. Lower contribution from Refining & Chemicals was offset by higher contribution from Integrated Gas, Renewable & Power, Exploration & Production, and Marketing & Services segments.

Interest expenses in the reported quarter were $606 million compared with $529 million in the year-ago period.

In fourth-quarter 2019, TOTAL acquired $227 million worth of assets and sold assets valued at $357 million.

Segment Details

Exploration & Production’s operating income was $2,031 million, up 3% from $1,976 million in fourth-quarter 2018.

Integrated Gas, Renewable & Power’s operating income was $794 million, up 17% from $676 million in the year-ago quarter.

Refining & Chemicals’ operating income was $580 million, down 36% from $900 million in the year-ago quarter.

Marketing & Services’ operating income was $474 million, up 42% from $333 million in fourth-quarter 2018.
Financial Update

Cash and cash equivalents as of Dec 31, 2019 were $27.4 billion compared with $27.9 billion at the end of 2018. Net debt-to-capital was 20.7% at the end of the quarter, up from 15.5% in the comparable period of 2018.

TOTAL repurchased shares worth $1.75 billion in 2019 and projects to buy back $2 billion shares in 2020. These buybacks are part of the $5-billion buyback program for the 2018-2020 time frame.

2020 Guidance

TOTAL expects organic production growth of more than 2% in 2020 driven by startups in 2019 and the ones expected in 2020, notably lara 2 in Brazil.

The company has been engaged in cost-saving initiatives and aims to continue the same in 2020. These actions will likely result in cumulative cost savings of $5 billion by the end of 2020. TOTAL continues to sell non-core assets and plans to divest assets worth $5 billion within the 2019-2020 time frame.

Zacks Rank

Currently, TOTAL carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Exxon Mobil Corporation (XOM - Free Report) reported fourth-quarter earnings per share of 41 cents, which missed the Zacks Consensus Estimate of 44 cents by 6.8%.

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