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ConocoPhillips (COP) Q1 Earnings Beat on Higher Oil Volumes

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ConocoPhillips (COP - Free Report) reported first-quarter 2024 adjusted earnings per share of $2.03, which beat the Zacks Consensus Estimate of $1.99. The bottom line, however, declined from the prior-year quarter’s level of $2.38.

One of the world’s leading independent oil and gas producers headquartered in Houston, TX, ConocoPhillips’ quarterly revenues of $14.5 billion decreased from $15.5 billion reported a year ago. The top line also missed the Zacks Consensus Estimate of $14.7 billion.

The better-than-expected quarterly earnings were driven by higher oil equivalent production volumes. The positives were partially offset by lower average realized oil equivalent prices.

ConocoPhillips Price, Consensus and EPS Surprise

ConocoPhillips Price, Consensus and EPS Surprise

ConocoPhillips price-consensus-eps-surprise-chart | ConocoPhillips Quote

Production

Total production averaged 1,902 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago quarter’s 1,792 MBoe/d. The metric also beat our estimate of 1,883.7 MBoe/d. Of the total output, almost 50% was crude oil. Overall production was higher than the year-ago period’s level, primarily due to the increased production in Alaska and Canada.

ConocoPhillips’ crude oil production increased to 944 thousand barrels per day (MBbls/d) from the year-ago quarter’s 937 MBbls/d but missed our estimate of 970.4 MBbls/d.

The production of natural gas liquids totaled 279 MBbls/d, higher than the year-ago period’s 271 MBbls/d. Bitumen production for the quarter totaled 129 MBbls/d, up from 69 MBbls/d reported in the year-ago quarter.

The company’s natural gas production was 3,302 million cubic feet per day (MMcf/d), higher than the year-ago level of 3,088 MMcf/d.

Realized Prices

The average realized oil equivalent price declined to $56.60 per barrel from the year-ago level of $60.89.

The average realized crude oil price for the first quarter was $78.64 per barrel, implying a slight increase from the year-ago figure of $77.65. The metric was above our projection of $77.12 per barrel.

The average realized natural gas price was $5.02 per thousand cubic feet, down from $7.30 reported in the year-ago quarter. Realized natural gas liquids price declined to $24.25 per barrel from the year-ago quarter’s $25.84.

Total Expenses

ConocoPhillips’ first-quarter total expenses declined to $10.7 billion from $10.9 billion in the corresponding period of 2023. The figure was also below our projection of $11.01 billion. The cost of purchased commodities fell to $5.3 billion from $6.1 billion reported a year ago.

Exploration costs plummeted to $112 million from $138 million in the comparable period of 2023.

Balance Sheet & Capital Spending

As of Mar 31, 2024, ConocoPhillips had $5.6 billion in cash and cash equivalents. The company had a total long-term debt of $17.3 billion and a short-term debt of $1.1 billion as of the same date.

Capital expenditure and investments totaled $2.9 billion. Net cash provided by operating activities was $4.9 billion.

Guidance

For the second quarter of 2024, COP expects production in the range of 1.91-1.95 MBoe/d. The company projects 2024 capital expenditure in the band of $11-$11.5 billion.

Zacks Rank and Key Picks

Currently, COP carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company (SM - Free Report) , EOG Resources Inc., (EOG - Free Report) and PBF Energy Inc. (PBF - Free Report) . While SM Energy sports a Zacks Rank #1 (Strong Buy), EOG Resources and PBF Energy carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

SM Energy Company is an independent oil and gas company, engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America. SM currently has a Value Score of B.

The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.33 and $6.96, respectively. The company has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

EOG Resources, an oil and gas exploration company, boasts attractive growth prospects, top-tier returns, and a disciplined management team, leveraging highly productive acreages in prime oil shale plays like the Permian and Eagle Ford.

The Zacks Consensus Estimate for EOG’s 2024 EPS is pegged at $12.15. The company has a Zacks Style Score of B for Value and A for Momentum. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days.

PBF Energy operates with a diverse asset base of six refineries, boasting higher daily crude processing capacity and a complex refining system, enabling the production of superior-grade refined products.

The Zacks Consensus Estimate for PBF’s 2024 and 2025 EPS is pegged at $7.39 and $5.87, respectively. PBF currently has a Zacks Style Score of A for Value and A for Momentum. Over the past 30 days, PBF has witnessed upward earnings estimate revisions for 2024 and 2025.


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