ConocoPhillips Q2 Adj. Profit Tops View, But Revenue Miss

(RTTNews) - Energy giant ConocoPhillips (COP) reported Thursday a profit for the second quarter that increased from last year, as higher realized prices and volumes improved revenues. Adjusted earnings per share topped analysts' expectations by a penny, but quarterly revenues missed their estimates. Meanwhile, total production grew from last year.

"Operational and financial performance was very strong in the second quarter. We continue to grow in our North American unconventional plays, while progressing our major projects," Chairman and CEO Ryan Lance said in a statement.

The Houston, Texas-based oil company reported earnings of $2.08 billion or $1.67 per share for the second quarter, higher than $2.05 billion, or $1.65 per share in the prior-year quarter. Earnings from continuing operations were $2.07 billion or $1.64 per share.

Results for the latest quarter primarily include additional income associated with pending claims and settlements, partially offset by leasehold impairments in the Canadian arctic.

Excluding items, adjusted earnings for the quarter was $2.0 billion, or $1.61 per share, compared to 1.75 billion or $1.41 per share in the year-ago quarter.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.60 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues and other income for the quarter increased to $14.70 billion from $14.14 billion in the same quarter last year, but missed three Wall Street analysts' consensus estimate of $15.38 billion for the quarter.

Total production for the quarter grew to 1,594 MBOED from 1,552 MBOED in the prior-year quarter. Eagle Ford and Bakken combined production increased by 38 percent.

Production from continuing operations for the quarter, excluding Libya, increased 6.5 percent to 1,556 million barrels of oil equivalent per day or MBOED, reflecting lower downtime and 4 percent net organic growth.

The company's total realized price was $70.17 per barrel of oil equivalent (BOE), higher than $66.82 per BOE in the prior-year quarter, reflecting higher average realized prices across all products such as natural gas, bitumen, natural gas liquids and crude oil.

Further, the company noted that it completed the sale of its Nigerian upstream business on Wednesday to Oando Energy Resources, a subsidiary of Oando PLC, for net proceeds of $1.4 billion, inclusive of deposits received. Proceeds from the sale will be available for general corporate purposes, including investments in the company's higher-margin, organic growth programs.

Looking ahead, the company continues to project third-quarter production in the range of 1,435 to 1,485 MBOED, and fourth-quarter production in the range of 1,590 to 1,640 MBOED, reflecting a strong anticipated exit rate at year-end.

For fiscal 2014, ConocoPhillips now projects production from continuing operations, excluding Libya, in a range of about 1,525 to 1,550 MBOED, up from the prior guidance of 1,510 to 1,550 MBOED.

The company noted that it is on track to achieve 3 to 5 percent volume and margin growth in 2014. It added that major projects in Canada, Malaysia and the U.K. are on track for startup in the second half of 2014.

"We expect to complete our major turnarounds in the third quarter and maintain a high level of both conventional and unconventional exploration activity. All of this positions us for strong momentum as we exit the year," Lance added.

Meanwhile, ConocoPhillips' larger peer Exxon Mobil Corp. (XOM) reported that second-quarter net income attributable to the company increased to $8.78 billion or $2.05 per share from $6.86 billion or $1.55 per share last year, reflecting strong operations and asset divestments

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $1.86 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues and other income for the quarter rose to $111.65 billion from $106.67 billion in the same quarter last year, and topped four Wall Street analysts' consensus estimate of $108.38 billion.

However, ExxonMobil's oil-equivalent production for the quarter decreased 5.7 percent to 3,840 koebd from last year. Excluding the impact of the expiry of the Abu Dhabi onshore concession, production decreased 2.3 percent.

In Thursday's regular trading session, COP is currently trading at $82.54, down $2.09 or 2.47% on a volume of 2.32 million shares. In the past 52-week period, the stock has been trading in a range of $62.74 to $87.09.