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TOTAL (TOT) to Report Q1 Earnings: What's in the Offing?

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TOTAL S.A. is set to report first-quarter earnings on May 5, before the opening bell. This integrated oil and gas company delivered a positive earnings surprise of 17.8% in the last reported quarter.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors at Play

The unexpected drop in oil prices in the first quarter and decline in global demand for oil due to the novel coronavirus outbreak are likely to have impacted TOTAL’s performance in the quarter. To preserve liquidity amid such unprecedented crisis, the company decided to lower planned capital expenditure for 2020 by 20%, suspend the share buyback program and target operating cost savings of $800 million compared with 2019, instead of $500 million previously announced. These initiatives are likely to positively reflect on first-quarter results.

TOTAL bought back $550 million shares in the first two months of 2020, which is likely to have had a positive impact on the bottom line in the to-be-reported quarter. During the quarter, the company sold a 27.5% interest in Fosmax LNG for $260 million, which is part of the $5-billion asset divestiture target for the 2019-2020 period.

Q1 Expectation
         
The Zacks Consensus Estimate for first-quarter earnings is 55 cents per share, which indicates a decline of 46.1% from the year-ago reported figure.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for TOTAL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

TOTAL S.A. Price and EPS Surprise

TOTAL S.A. Price and EPS Surprise

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

Earnings ESP: The company has an Earnings ESP of 0.00%.

Zacks Rank: TOTAL currently carries a Zacks Rank of 5 (Strong Sell).

Stocks to Consider

Investors can consider the following players from the same sector that have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Devon Energy Corporation (DVN - Free Report) is slated to release first-quarter 2020 numbers on May 5. It has an Earnings ESP of +3.80% and carries a Zacks Rank 3.

WPX Energy is scheduled to release first-quarter 2020 numbers on May 6. It has an Earnings ESP of +4.76% and carries a Zacks Rank #3.

Talos Energy Inc. (TALO - Free Report) is set to release first-quarter earnings on May 6. It has an Earnings ESP of +40.00% and carries a Zacks Rank #3.

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