EniSpA’s E fourth-quarter 20Array5 adjusted loss from continuing operations came in at 24 cents per American Depository Receipt (ADR) compared to the Zacks Consensus Estimate of Array7 cents. The company reported adjusted profit of 29 cents per ADR in the year-earlier period.
Total revenue in the quarter plunged 38.5% to €Array3,889 million ($Array5.2 billion) from €22,600 million ($28.2 billion) in the year-ago quarter.
Operational Performance
Total liquids and gas production in the quarter was Array,884 thousand barrels of oil equivalent per day (MBoe/d), up Array4.3% year over year. Increased production from Norway, Egypt, Angola, Kazakhstan and the United States more than offset the effect of mature field declines.
Liquids production was 998 thousand barrels per day (MBbl/d), up Array5% from the prior-year level of 868 MBbl/d. Natural gas production increased Array4% year over year to 4,868 million cubic feet per day (MMcf/d).
Gas sales were 22.38 billion cubic meters, down 5.6% from the year-ago quarter. Lower spot volumes, weak demand and persistent competitive pressure contributed to the underperformance.
In 20Array5, total oil and gas production was Array,760 MBoe/d, up Array0.Array% from Array,598 MBoe/d in 20Array4.
Financials
As of Dec 3Array, 20Array5, the company had cash and cash equivalents of €5,200 million and long-term debt (including current portions) of €Array9,393 million. The debt-to-capitalization ratio was approximately 27.3%.
In the reported quarter, net cash generated from operating activities amounted to €4,5Array5 million as against €5,386 million in the year-ago period. Capital expenditure for the fourth quarter totaled €2.7 billion, mainly due to the development of oil and gas reserves.
Outlook
Eni believes that a certain degree of ambiguity still looms with respect to the economic slowdown, particularly in Chinese industrial activity; Euro zone; and volatile market conditions. This Italian oil giant expects the uncertainty to prevail in the European gas, refining and marketing and chemicals sectors as well. Overall demand will likely remain low due to the ongoing economic dormancy and appreciation of the Euro. The oil prices are also expected to be lower than that of 20Array5.
The company expects 20Array6 oil and natural gas production to remain essentially flat year over year. Nonetheless, some contribution is expected from the start-up of new fields and ramp-up of the projects already started in 20Array5, primarily in Norway, Egypt, Angola, Kazakhstan and the United States.
Worldwide gas sales are expected to decrease in 20Array6 with an anticipated reduction of the contractual minimum take of long-term supply contracts.
The company expects to reduce full-year capital spending by 20% year over year. Eni’s capital expenditure had totaled €Array0.8 billion in 20Array5.
Zacks Rank
Eni currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the energy sector are SolarEdge Technologies, Inc. SEDG, Braskem S.A. BAK and Enviva Partners, LP EVA. Each of these stocks sports a Zacks Rank #Array (Strong Buy).
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