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Eni (E) Q2 Earnings Miss Estimates Despite Revenue Growth
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Eni SpA (E - Free Report) reported second-quarter 2024 adjusted earnings from continuing operations of $0.98 per American Depository Receipt (ADR), which missed the Zacks Consensus Estimate of $1.12. The bottom line declined from the year-ago quarter’s $1.24.
Total quarterly revenues of $24.8 billion increased from $21.6 billion recorded a year ago. However, the top line missed the Zacks Consensus Estimate of $25.7 billion.
The company’s weak quarterly earnings resulted from lower throughputs. Additionally, retail gas sales and biofuel margins deteriorated, adversely impacting its overall performance.
Eni operates through four business segments — Exploration & Production, Global Gas & LNG Portfolio, Enilive Refining and Chemicals, and Plenitude & Power.
Exploration & Production
Total oil and gas production in the second quarter was 1,712 thousand barrels of oil equivalent per day (MBoe/d), up almost 6% from 1,616 recorded in the prior-year quarter.
Liquids production totaled 777 thousand barrels per day (MBbl/d), up 3% from the year-ago quarter’s 757 MBbl/d. Natural gas production increased to 4,888 million cubic feet per day from 4,491 recorded a year ago.
The average realized price of liquids was $77.25 per barrel, up from $69.72 reported a year ago. The realized natural gas price was $7.26 per thousand cubic feet, up 3% from the $7.05 registered in the year-ago period.
Production growth and higher average liquids price realization aided the company’s Exploration & Production segment. The segment reported a proforma adjusted EBIT of €3.5 billion, up from €2.8 billion recorded in the June-end quarter of 2023.
Global Gas & LNG Portfolio
Eni’s worldwide natural gas sales in the reported quarter totaled 9.38 billion cubic meters (bcm), down 16% year over year from 11.15 bcm.
The integrated energy major’s Global Gas & LNG Portfolio business segment reported a proforma adjusted EBIT of €334 million, marking a significant decline of 71% from the year-ago quarter’s €1,143 million. The reduction was primarily due to one-off effects from prior negotiations and settlements, coupled with a less favorable pricing environment and diminished volatility, which negatively impacted its trading and optimization opportunities.
Refining, Chemicals & Power
For the second quarter, total refinery throughputs were 5.81 million tons (mmtons) compared with 6.69 in the corresponding period of 2023. Petrochemical product sales decreased 7% year over year to 0.76 mmtons.
For the quarter under review, the segment reported a proforma adjusted negative EBIT of €102 million, wider than a negative EBIT of €9 million in the year-ago quarter. The deterioration can be attributed to weaker refining margins and lower throughputs.
Enilive & Plenitude
Retail gas sales managed by Plenitude declined 16% year over year to 0.73 bcm.
The company reported a proforma adjusted EBIT of €269 million from this segment, marking a 20% year-over-year decrease. This can be attributed to deteriorating biofuel margins.
Financials
As of Jun 30, Eni had a long-term debt of €23.4 billion, and cash and cash equivalents of €10.2 billion.
For the reported quarter, net cash generated by operating activities was €4.6 billion. Capital expenditure totaled €2.1 billion.
Outlook
For 2024, the company anticipates hydrocarbon production in the exploration and production segment to be at the higher end of the 1.69-1.71 million barrels of oil equivalent per day range, based on an updated Brent price of $86 per barrel. The metric indicates an increase from the year-earlier figure of 1.66 million barrels of oil equivalent per day.
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.26, respectively. The partnership has witnessed upward earnings estimate revisions for 2025 in the past seven days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.30. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past seven days.
Hess is a leading oil and natural gas exploration and production company that made several world-class oil discoveries in the Stabroek Block, located off the coast of Guyana. The company is currently in the process of being acquired by supermajor Chevron in an all-stock deal worth $53 billion. The merger will likely result in the creation of an energy behemoth with a massive portfolio of producing assets.
The Zacks Consensus Estimate for HES’ 2024 EPS is pegged at $10.98. The company has a Zacks Style Score of A for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
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Eni (E) Q2 Earnings Miss Estimates Despite Revenue Growth
Eni SpA (E - Free Report) reported second-quarter 2024 adjusted earnings from continuing operations of $0.98 per American Depository Receipt (ADR), which missed the Zacks Consensus Estimate of $1.12. The bottom line declined from the year-ago quarter’s $1.24.
Total quarterly revenues of $24.8 billion increased from $21.6 billion recorded a year ago. However, the top line missed the Zacks Consensus Estimate of $25.7 billion.
The company’s weak quarterly earnings resulted from lower throughputs. Additionally, retail gas sales and biofuel margins deteriorated, adversely impacting its overall performance.
Eni SpA Price, Consensus and EPS Surprise
Eni SpA price-consensus-eps-surprise-chart | Eni SpA Quote
Operational Performance
Eni operates through four business segments — Exploration & Production, Global Gas & LNG Portfolio, Enilive Refining and Chemicals, and Plenitude & Power.
Exploration & Production
Total oil and gas production in the second quarter was 1,712 thousand barrels of oil equivalent per day (MBoe/d), up almost 6% from 1,616 recorded in the prior-year quarter.
Liquids production totaled 777 thousand barrels per day (MBbl/d), up 3% from the year-ago quarter’s 757 MBbl/d. Natural gas production increased to 4,888 million cubic feet per day from 4,491 recorded a year ago.
The average realized price of liquids was $77.25 per barrel, up from $69.72 reported a year ago. The realized natural gas price was $7.26 per thousand cubic feet, up 3% from the $7.05 registered in the year-ago period.
Production growth and higher average liquids price realization aided the company’s Exploration & Production segment. The segment reported a proforma adjusted EBIT of €3.5 billion, up from €2.8 billion recorded in the June-end quarter of 2023.
Global Gas & LNG Portfolio
Eni’s worldwide natural gas sales in the reported quarter totaled 9.38 billion cubic meters (bcm), down 16% year over year from 11.15 bcm.
The integrated energy major’s Global Gas & LNG Portfolio business segment reported a proforma adjusted EBIT of €334 million, marking a significant decline of 71% from the year-ago quarter’s €1,143 million. The reduction was primarily due to one-off effects from prior negotiations and settlements, coupled with a less favorable pricing environment and diminished volatility, which negatively impacted its trading and optimization opportunities.
Refining, Chemicals & Power
For the second quarter, total refinery throughputs were 5.81 million tons (mmtons) compared with 6.69 in the corresponding period of 2023. Petrochemical product sales decreased 7% year over year to 0.76 mmtons.
For the quarter under review, the segment reported a proforma adjusted negative EBIT of €102 million, wider than a negative EBIT of €9 million in the year-ago quarter. The deterioration can be attributed to weaker refining margins and lower throughputs.
Enilive & Plenitude
Retail gas sales managed by Plenitude declined 16% year over year to 0.73 bcm.
The company reported a proforma adjusted EBIT of €269 million from this segment, marking a 20% year-over-year decrease. This can be attributed to deteriorating biofuel margins.
Financials
As of Jun 30, Eni had a long-term debt of €23.4 billion, and cash and cash equivalents of €10.2 billion.
For the reported quarter, net cash generated by operating activities was €4.6 billion. Capital expenditure totaled €2.1 billion.
Outlook
For 2024, the company anticipates hydrocarbon production in the exploration and production segment to be at the higher end of the 1.69-1.71 million barrels of oil equivalent per day range, based on an updated Brent price of $86 per barrel. The metric indicates an increase from the year-earlier figure of 1.66 million barrels of oil equivalent per day.
Zacks Rank & Stocks to Consider
Eni currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Sunoco LP (SUN - Free Report) , SM Energy Company (SM - Free Report) and Hess Corporation (HES - Free Report) . While Sunoco and SM Energy currently sport a Zacks Rank #1 (Strong Buy) each, Hess carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.26, respectively. The partnership has witnessed upward earnings estimate revisions for 2025 in the past seven days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.30. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past seven days.
Hess is a leading oil and natural gas exploration and production company that made several world-class oil discoveries in the Stabroek Block, located off the coast of Guyana. The company is currently in the process of being acquired by supermajor Chevron in an all-stock deal worth $53 billion. The merger will likely result in the creation of an energy behemoth with a massive portfolio of producing assets.
The Zacks Consensus Estimate for HES’ 2024 EPS is pegged at $10.98. The company has a Zacks Style Score of A for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.