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Equinor (EQNR) Lags on Q2 Earnings, Reiterates Production View
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Equinor ASA (EQNR - Free Report) reported second-quarter 2023 adjusted earnings per share of 74 cents, missing the Zacks Consensus Estimate of 82 cents. The bottom line also declined from the year-ago quarter’s earnings of $1.56 per share.
Total quarterly revenues declined to $22,872 million from $36,459 million in the prior-year quarter. The top line missed the Zacks Consensus Estimate of $43,431 million.
Weak quarterly earnings were driven by lower liquids and gas production in Norway.
Exploration & Production Norway (E&P Norway): The segment reported adjusted earnings of $6,003 million, declining from $14,330 million in the year-ago quarter. Lower liquids and gas production affected the segment.
The company’s average daily production of liquids and gas declined 3% year over year to 1,304 thousand barrels of oil equivalent per day (MBoe/d) and missed our estimate of 1,437.5 MBoe/d. The underperformance resulted from the shutdown of Hammerfest LNG and a delayed start-up after a turnaround on Nyhamna. This impacted the production of natural gas-producing assets.
E&P International: The segment’s adjusted operating profit was $751 million, down from the year-ago quarter’s $1,111 million. Lower liquids and gas prices primarily affected the segment.
The average daily equity production of liquids and gas increased to 328 MBoe/d from 306 MBoe/d in the year-ago quarter and surpassed our estimate of 317.5 MBoe/d. The segment was aided by the restart of production at Brazil’s Peregrino field.
E&P USA: Through the segment, Equinor generated an adjusted quarterly profit of $226 million, down from $881 million in the June-end quarter of 2022. The segment was affected by a natural decline in the Appalachian basin and several mature fields in the Gulf of Mexico.
The integrated firm’s average equity production of liquids and gas was 363 MBoe/d, up from 335 MBoe/d in the year-ago quarter. The metric is also above our projection of 346.5 MBoe/d.
Marketing, Midstream & Processing: The segment reported adjusted earnings of $665 million, declining from the $1,286 million reported a year ago.
Renewables: The segment reported an adjusted loss of $84 million, wider than a loss of $42 million reported in the year-ago quarter. Lower prices and higher costs from projects under development primarily hurt the segment.
Free Cash Flow
In the June-end quarter, Equinor generated a negative free cash flow of $10,758 million against a free cash flow of $6,628 million in the year-ago period. The underperformance resulted from declining operating cash flows.
Balance Sheet
As of Jun 30, 2023, Equinor reported $19,650 million in cash and cash equivalents. The company’s long-term debt was $24,707 million at the second-quarter end.
2023 Outlook
Equinor kept its production growth expectations at 3% for 2023. The company reiterated its organic capital spending budget of $10-11 billion for the year.
For the 2024-2026 period, the oil major expects average organic capital spending of $13 billion per annum.
One of the leading suppliers of integrated technology solutions, Oceaneering boasts an impressive portfolio of diversified products and services. OII has a Zacks Style Score of A for Momentum.
Oceaneering has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for OII’s 2023 and 2024 earnings per share is pegged at $1.12 and $1.34, respectively.
Global Partners is a leading operator of gasoline stations and convenience stores. Over the past 30 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2023 and 2024 earnings per share is pegged at $3.85 and $3.61, respectively. GLP currently has a Zacks Style Score of A for Value and Momentum.
Evolution Petroleum is an independent energy company. EPM has a Zacks Style Score of A for Growth.
Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings per share is pegged at $1.11 and $1.08, respectively.
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Equinor (EQNR) Lags on Q2 Earnings, Reiterates Production View
Equinor ASA (EQNR - Free Report) reported second-quarter 2023 adjusted earnings per share of 74 cents, missing the Zacks Consensus Estimate of 82 cents. The bottom line also declined from the year-ago quarter’s earnings of $1.56 per share.
Total quarterly revenues declined to $22,872 million from $36,459 million in the prior-year quarter. The top line missed the Zacks Consensus Estimate of $43,431 million.
Weak quarterly earnings were driven by lower liquids and gas production in Norway.
Equinor ASA Price, Consensus and EPS Surprise
Equinor ASA price-consensus-eps-surprise-chart | Equinor ASA Quote
Segmental Analysis
Exploration & Production Norway (E&P Norway): The segment reported adjusted earnings of $6,003 million, declining from $14,330 million in the year-ago quarter. Lower liquids and gas production affected the segment.
The company’s average daily production of liquids and gas declined 3% year over year to 1,304 thousand barrels of oil equivalent per day (MBoe/d) and missed our estimate of 1,437.5 MBoe/d. The underperformance resulted from the shutdown of Hammerfest LNG and a delayed start-up after a turnaround on Nyhamna. This impacted the production of natural gas-producing assets.
E&P International: The segment’s adjusted operating profit was $751 million, down from the year-ago quarter’s $1,111 million. Lower liquids and gas prices primarily affected the segment.
The average daily equity production of liquids and gas increased to 328 MBoe/d from 306 MBoe/d in the year-ago quarter and surpassed our estimate of 317.5 MBoe/d. The segment was aided by the restart of production at Brazil’s Peregrino field.
E&P USA: Through the segment, Equinor generated an adjusted quarterly profit of $226 million, down from $881 million in the June-end quarter of 2022. The segment was affected by a natural decline in the Appalachian basin and several mature fields in the Gulf of Mexico.
The integrated firm’s average equity production of liquids and gas was 363 MBoe/d, up from 335 MBoe/d in the year-ago quarter. The metric is also above our projection of 346.5 MBoe/d.
Marketing, Midstream & Processing: The segment reported adjusted earnings of $665 million, declining from the $1,286 million reported a year ago.
Renewables: The segment reported an adjusted loss of $84 million, wider than a loss of $42 million reported in the year-ago quarter. Lower prices and higher costs from projects under development primarily hurt the segment.
Free Cash Flow
In the June-end quarter, Equinor generated a negative free cash flow of $10,758 million against a free cash flow of $6,628 million in the year-ago period. The underperformance resulted from declining operating cash flows.
Balance Sheet
As of Jun 30, 2023, Equinor reported $19,650 million in cash and cash equivalents. The company’s long-term debt was $24,707 million at the second-quarter end.
2023 Outlook
Equinor kept its production growth expectations at 3% for 2023. The company reiterated its organic capital spending budget of $10-11 billion for the year.
For the 2024-2026 period, the oil major expects average organic capital spending of $13 billion per annum.
Zacks Rank & Stocks to Consider
Equinor currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy sector are Oceaneering International, Inc. (OII - Free Report) , Global Partners (GLP - Free Report) and Evolution Petroleum Corporation (EPM - Free Report) , currently sporting a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
One of the leading suppliers of integrated technology solutions, Oceaneering boasts an impressive portfolio of diversified products and services. OII has a Zacks Style Score of A for Momentum.
Oceaneering has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for OII’s 2023 and 2024 earnings per share is pegged at $1.12 and $1.34, respectively.
Global Partners is a leading operator of gasoline stations and convenience stores. Over the past 30 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2023 and 2024 earnings per share is pegged at $3.85 and $3.61, respectively. GLP currently has a Zacks Style Score of A for Value and Momentum.
Evolution Petroleum is an independent energy company. EPM has a Zacks Style Score of A for Growth.
Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings per share is pegged at $1.11 and $1.08, respectively.