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ConocoPhillips (COP) Q4 Earnings Meet, Revenues Top Estimates

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ConocoPhillips (COP - Free Report) reported fourth-quarter 2017 adjusted earnings of 45 cents per share, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company had posted a loss of 26 cents.

Revenues of $8,736 million beat the Zacks Consensus Estimate of $7,698 million and improved from $7,254 million in the year-ago quarter.

The fourth-quarter results were supported by higher oil and natural gas price realizations. 

Hike in Dividend & Share Repurchases

ConocoPhillips got an approval from the board of directors to hike the quarterly dividend to 28.5 cents per share from 26.5 cents, representing an increase of 7.5%. The new dividend will likely be paid on Mar 1 to stockholders of record as of Feb 12.

The company also enhanced its share buyback program. With this, ConocoPhillips will increase share repurchases during 2018 to $2 billion from the prior projection of $1.5 billion.

Exploration and Production

Production from continuing operations averaged 1,256 thousand barrels of oil equivalent per day (MBOED) in the quarter, lower than 1,596 MBOED in the year-ago quarter. The decline was led by planned divestment of assets.

Price Realization

Average realized price for oil was $58.99 a barrel, up from $47.05 in the year-earlier quarter. Natural gas liquids were sold at $32.79 a barrel, up from $21.82 in the year-ago quarter. The price of natural gas was $4.59 per thousand cubic feet, compared with $3.44 in fourth-quarter 2016.

Financials

As of Dec 31, 2017, the company had total cash and cash equivalents of $6.3 billion and debt of $19.7 billion, with a debt-to-capitalization ratio of 39%. In the reported quarter, ConocoPhillips generated $2.5 billion in cash from operating activities. Capital expenditures and investments totaled $1.5 billion and dividends payments grossed $319 million.

Total Expenses

The company reported expenses of $7.4 billion in the fourth quarter, compared with $7.3 billion in the October-December quarter of 2016.

Q4 Share Performance

In the fourth quarter, ConocoPhillips gained 9.6%, outperforming the industry’s 9%.

Proved Reserves

The company’s initial estimate for 2017 proved reserves of oil and natural gas stands at 5 billion barrels of oil equivalent.  

Zacks Rank & Other Key Picks

ConocoPhillips carries a Zacks Rank #2 (Buy). A few other top-ranked players in the energy sector are Statoil ASA , Pioneer Natural Resources Co. and Cabot Oil & Gas . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Stavanger, Norway, Statoil is a major international integrated energy player. The company is expected to witness year-over-year earnings growth of 17.1% for 2018.

Headquartered at Irving, TX, Pioneer Natural Resources is an upstream energy firm. The company delivered an average positive earnings surprise of 67.6% for the preceding four quarters.

Headquartered in Houston, TX, Cabot is also an upstream energy company. The firm will likely see year-over-year earnings growth of 128.4% in 2018.

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