ConocoPhillips (COP) reported fourth-quarter 2014 adjusted earnings of 60 cents per share, missing the Zacks Consensus Estimate of 62 cents per share and decreasing from the year-earlier profit of $1.40.
Revenues in the reported quarter decreased to $11,851.0 million from the year-ago level of $13,985.0 million. However, revenues surpassed the Zacks Consensus Estimate of $11,735.0 million.
Full-year 2014 adjusted earnings came in at $5.30 a share, missing the Zacks Consensus Estimate of $5.42. Earnings were also less than $5.70 recorded in the prior year.
Total revenue of $55,517.0 million in 2014 decreased 4.7% year over year and missed the Zacks Consensus Estimate of $55,650.0 million.
Exploration and Production
Daily production averaged 1.589 million barrels of oil equivalent (MMBOE) in the quarter, up from 1.473 MMBOE in the year-ago quarter.
Full-year production of 1.540 MMBOE per day also increased from the prior-year production level of 1.502 MMBOE/d.
Price Realization
In the reported quarter, the company’s total realized price was $52.88 per BOE compared with $65.41 per BOE in the fourth quarter of 2013, reflecting lower average realized prices across all products.
Average realized price for oil was $71.31 per barrel compared with $100.83 in the year-earlier quarter. Natural gas liquids were sold at $31.07 per barrel, down from the year-ago level of $43.07 per barrel. The price for natural gas was $5.98 per thousand cubic feet versus $5.88 in fourth-quarter 2013.
Financials
In 2014, ConocoPhillips generated $16,592.0 million in cash from continuing operating activities. As of Dec 31, 2014, the company had total cash and cash equivalents of $5,062.0 million and $22,565.0 million in debt, with a debt-to-capitalization ratio of 30%.
ConocoPhillips also paid $3,525.0 million in dividends and incurred $17,085.0 million in capital expenditures during 2014.
Guidance
ConocoPhillips expects to deliver 2–3% production growth in 2015. For the first quarter of 2015, production from continuing operations is expected at 1,570–1,610 MBOED, excluding Libya.
Outlook
With leading positions in both natural gas and heavy crude oil in North America, as well as a legacy position in the North Sea and growing exposure to lucrative international regions, ConocoPhillips expects to replace reserves and sustain production growth over the long term. The company’s exploration initiatives toward liquids-rich plays are gaining momentum through the Eagle Ford, Bakken and North Barnett shale plays.
We believe that any downtrend in the global economy will affect the supply-demand fundamentals of oil and gas, hurting the sales prices of crude oil and natural gas.
ConocoPhillips currently carries a Zacks Rank #5 (Strong Sell). Better-ranked energy sector stocks include Cheniere Energy Partners LP (CQP), World Fuel Services Corp. (INT) and Transocean Partners LLC (RIGP). All these stocks currently sport a Zacks Rank #1 (Strong Buy).
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