ConocoPhillips COP reported fourth-quarter 2017 adjusted earnings of 45 cents per share, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company had posted a loss of 26 cents.
Revenues of $8,736 million beat the Zacks Consensus Estimate of $7,698 million and improved from $7,254 million in the year-ago quarter.
The fourth-quarter results were supported by higher oil and natural gas price realizations.
Hike in Dividend & Share Repurchases
ConocoPhillips got an approval from the board of directors to hike the quarterly dividend to 28.5 cents per share from 26.5 cents, representing an increase of 7.5%. The new dividend will likely be paid on Mar 1 to stockholders of record as of Feb 12.
The company also enhanced its share buyback program. With this, ConocoPhillips will increase share repurchases during 2018 to $2 billion from the prior projection of $1.5 billion.
Exploration and Production
Production from continuing operations averaged 1,256 thousand barrels of oil equivalent per day (MBOED) in the quarter, lower than 1,596 MBOED in the year-ago quarter. The decline was led by planned divestment of assets.
Price Realization
Average realized price for oil was $58.99 a barrel, up from $47.05 in the year-earlier quarter. Natural gas liquids were sold at $32.79 a barrel, up from $21.82 in the year-ago quarter. The price of natural gas was $4.59 per thousand cubic feet, compared with $3.44 in fourth-quarter 2016.
Financials
As of Dec 31, 2017, the company had total cash and cash equivalents of $6.3 billion and debt of $19.7 billion, with a debt-to-capitalization ratio of 39%. In the reported quarter, ConocoPhillips generated $2.5 billion in cash from operating activities. Capital expenditures and investments totaled $1.5 billion and dividends payments grossed $319 million.
Total Expenses
The company reported expenses of $7.4 billion in the fourth quarter, compared with $7.3 billion in the October-December quarter of 2016.
Q4 Share Performance
In the fourth quarter, ConocoPhillips gained 9.6%, outperforming the industry’s 9%.
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Proved Reserves
The company’s initial estimate for 2017 proved reserves of oil and natural gas stands at 5 billion barrels of oil equivalent.
Zacks Rank & Other Key Picks
ConocoPhillips carries a Zacks Rank #2 (Buy). A few other top-ranked players in the energy sector are Statoil ASA STO, Pioneer Natural Resources Co. PXD and Cabot Oil & Gas COG. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Stavanger, Norway, Statoil is a major international integrated energy player. The company is expected to witness year-over-year earnings growth of 17.1% for 2018.
Headquartered at Irving, TX, Pioneer Natural Resources is an upstream energy firm. The company delivered an average positive earnings surprise of 67.6% for the preceding four quarters.
Headquartered in Houston, TX, Cabot is also an upstream energy company. The firm will likely see year-over-year earnings growth of 128.4% in 2018.
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