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Imperial Oil’s (IMO - Free Report) stock has seen an insignificant change in its movement since second-quarter 2021 earnings announcement on Jul 30.
Despite the company’s impressive earnings and revenue results, the firm’s shares failed to display an uptrend possibly due to increased total expenses, and an escalated capital and exploration spending in the quarter under review.
Delving Deeper
Imperial Oil reported second-quarter 2021 adjusted earnings per share of 41 cents, beating the Zacks Consensus Estimate of 40 cents. The year-ago bottom line was a loss of 52 cents per share. This outperformance was primarily attributable to an impressive revenue contribution from the upstream unit on account of higher realizations of around $1,100 million.
TheCanadian integrated oil and gas player’s quarterly revenues of $6.55 billion surpassed the Zacks Consensus Estimate of $5.74 billion. Also, the top line rose from the year-ago quarter’s sales of $2.68 billion.
Segmental Information
Upstream: Revenues of C$3,934 million increased from the prior-year level of C$1,180 million. The segment reported a net income of C$247 million against a net loss of C$444 million in the year-ago quarter. This upside was attributable to higher price realizations of around $1,100 million along with expanded volumes of around $280 million.
Net production volumes during the quarter under review averaged 356,000 barrels of oil equivalent per day (Boe/d), up from 341,000 Boe/d in the year-ago quarter. Total oil and NGL output amounted to 336,000 barrels per day (BPD) compared with 317,000 BPD in second-quarter 2020. Net oil and NGL output from Kearl and Cold Lake totalled 174,000 bpd and 111,000 bpd, respectively. Syncrude output averaged 38,000 BPD, down 22.4% from the year-earlier quarter. Net natural gas production came in at 119 million cubic feet per day (Mcf/d), lower than 146 Mcf/d in the comparable quarter last year.
Bitumen price realizations totaled C$57.26 a barrel, up from C$12.82 in the year-ago quarter. The company received an average realized price of C$80.8 per barrel of synthetic oil compared with the year-ago quarter’s C$32.2. For conventional crude oil, it received C$58.44 per barrel compared with the year-ago quarter’s C$15.47. Prices of NGL increased to C$30.07 a barrel while that of gas rose to C$3.45 per thousand cubic feet year over year.
Downstream: Revenues of C$5,831 million were up from C$2,738 million in second-quarter 2020. Moreover, the segment earned a net income of C$60 million against a net loss of C$32 million in the year-ago quarter, attributable to strong margins of about $200 million.
Refinery throughput in the second quarter averaged 332,000 BPD, higher than the prior-year quarter’s level of 278,000 BPD. Capacity utilization of 78% compared favorably with the year-earlier level of 66%. This outperformance was on account of reduced coronavirus-induced impacts.
Chemical: Revenues of C$240 million rose from C$119 million in second-quarter 2020. Net income was recorded at C$109 million compared with the year-ago quarter’s tally of C$7 million.
Imperial Oil Limited Price, Consensus and EPS Surprise
Total expenses of C$7,576 million increased from the year-ago quarter’s C$4,403 million.
In the quarter under consideration, the company’s capital and exploration expenditures summed C$259 million, up from the year-ago quarter’s C$207 million. Of the total expenditure, 50.2% was allotted to the upstream segment.
Financial Performance
Imperial Oil’s cash flow from operating activities was C$852 million in the reported quarter. However, in the year-ago period, cash flow used operating activities came in at C$816 million.
The company returned C$161 million to its shareholders through dividends in the reported quarter. It paid out 22 Canadian cents per share of dividend, which matched the year-ago figure.
As of Jun 30, the company held C$776 million of cash and cash equivalents. Its total debt amounted to C$5,262 million, representing a total debt-to-total capital of 20.1%.
Adhering to the company's long-standing obligation to its shareholders, Imperial Oil revised its existing share purchase policy to buy up to 5% of outstanding common shares by Jun 28, 2022.
Outlook
Kearl's annual output is now projected to be 265,000 total gross BPD, reflecting a 10,000 total gross BPD improvement from the prior forecast as the same now opt for turnaround activities only once a year starting 2021, a year earlier than planned.
Full-year gross output at Cold Lake is now projected to reach 135,000 BPD, up 5,000 BPD from earlier expectations, owing largely to production optimization and reliability improvements.
For the ongoing year, Imperial Oil anticipates its capital expenditures to be $1.2 billion.
Image: Bigstock
Imperial Oil (IMO) Stock Barely Moves Despite Q2 Earnings Beat
Imperial Oil’s (IMO - Free Report) stock has seen an insignificant change in its movement since second-quarter 2021 earnings announcement on Jul 30.
Despite the company’s impressive earnings and revenue results, the firm’s shares failed to display an uptrend possibly due to increased total expenses, and an escalated capital and exploration spending in the quarter under review.
Delving Deeper
Imperial Oil reported second-quarter 2021 adjusted earnings per share of 41 cents, beating the Zacks Consensus Estimate of 40 cents. The year-ago bottom line was a loss of 52 cents per share. This outperformance was primarily attributable to an impressive revenue contribution from the upstream unit on account of higher realizations of around $1,100 million.
TheCanadian integrated oil and gas player’s quarterly revenues of $6.55 billion surpassed the Zacks Consensus Estimate of $5.74 billion. Also, the top line rose from the year-ago quarter’s sales of $2.68 billion.
Segmental Information
Upstream: Revenues of C$3,934 million increased from the prior-year level of C$1,180 million. The segment reported a net income of C$247 million against a net loss of C$444 million in the year-ago quarter. This upside was attributable to higher price realizations of around $1,100 million along with expanded volumes of around $280 million.
Net production volumes during the quarter under review averaged 356,000 barrels of oil equivalent per day (Boe/d), up from 341,000 Boe/d in the year-ago quarter. Total oil and NGL output amounted to 336,000 barrels per day (BPD) compared with 317,000 BPD in second-quarter 2020. Net oil and NGL output from Kearl and Cold Lake totalled 174,000 bpd and 111,000 bpd, respectively. Syncrude output averaged 38,000 BPD, down 22.4% from the year-earlier quarter. Net natural gas production came in at 119 million cubic feet per day (Mcf/d), lower than 146 Mcf/d in the comparable quarter last year.
Bitumen price realizations totaled C$57.26 a barrel, up from C$12.82 in the year-ago quarter. The company received an average realized price of C$80.8 per barrel of synthetic oil compared with the year-ago quarter’s C$32.2. For conventional crude oil, it received C$58.44 per barrel compared with the year-ago quarter’s C$15.47. Prices of NGL increased to C$30.07 a barrel while that of gas rose to C$3.45 per thousand cubic feet year over year.
Downstream: Revenues of C$5,831 million were up from C$2,738 million in second-quarter 2020. Moreover, the segment earned a net income of C$60 million against a net loss of C$32 million in the year-ago quarter, attributable to strong margins of about $200 million.
Refinery throughput in the second quarter averaged 332,000 BPD, higher than the prior-year quarter’s level of 278,000 BPD. Capacity utilization of 78% compared favorably with the year-earlier level of 66%. This outperformance was on account of reduced coronavirus-induced impacts.
Chemical: Revenues of C$240 million rose from C$119 million in second-quarter 2020. Net income was recorded at C$109 million compared with the year-ago quarter’s tally of C$7 million.
Imperial Oil Limited Price, Consensus and EPS Surprise
Imperial Oil Limited price-consensus-eps-surprise-chart | Imperial Oil Limited Quote
Total Costs & Capex
Total expenses of C$7,576 million increased from the year-ago quarter’s C$4,403 million.
In the quarter under consideration, the company’s capital and exploration expenditures summed C$259 million, up from the year-ago quarter’s C$207 million. Of the total expenditure, 50.2% was allotted to the upstream segment.
Financial Performance
Imperial Oil’s cash flow from operating activities was C$852 million in the reported quarter. However, in the year-ago period, cash flow used operating activities came in at C$816 million.
The company returned C$161 million to its shareholders through dividends in the reported quarter. It paid out 22 Canadian cents per share of dividend, which matched the year-ago figure.
As of Jun 30, the company held C$776 million of cash and cash equivalents. Its total debt amounted to C$5,262 million, representing a total debt-to-total capital of 20.1%.
Adhering to the company's long-standing obligation to its shareholders, Imperial Oil revised its existing share purchase policy to buy up to 5% of outstanding common shares by Jun 28, 2022.
Outlook
Kearl's annual output is now projected to be 265,000 total gross BPD, reflecting a 10,000 total gross BPD improvement from the prior forecast as the same now opt for turnaround activities only once a year starting 2021, a year earlier than planned.
Full-year gross output at Cold Lake is now projected to reach 135,000 BPD, up 5,000 BPD from earlier expectations, owing largely to production optimization and reliability improvements.
For the ongoing year, Imperial Oil anticipates its capital expenditures to be $1.2 billion.
Zacks Rank & Key Picks
Imperial Oil currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Devon Energy Corporation (DVN - Free Report) , Matador Resources Company (MTDR - Free Report) and Continental Resources, Inc. , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.