ConocoPhillips Q3 Profit Rises, Beats View; Lowers Q4 Production Outlook

(RTTNews) - Energy giant ConocoPhillips (COP) on Thursday reported a 9 percent increase in profit for the third quarter from last year, helped by a gain on an asset sale in Nigeria and higher production that helped offset lower revenue amid lower realized prices.

Adjusted earnings per share for the quarter topped analysts' expectations, while revenues missed their estimates. Looking ahead, the company lowered its production outlook for the fourth quarter.

The Houston, Texas-based oil company reported earnings for the third quarter of $2.70 billion or $2.17 per share, up from $2.48 billion or $2.00 per share in the prior-year quarter.

Special items in the latest quarter primarily related to discontinued operations as a result of a gain from the sale of the Nigerian business in July for proceeds of $1.4 billion.

The latest quarter's results also include favorable settlements and a tax benefit on interest expense within the Canada, Asia Pacific and Middle East, and Corporate segments, which more than offset property and leasehold impairments in the Lower 48 segment.

Excluding items, adjusted earnings for the quarter were $1.61 billion or $1.29 per share, compared to $1.82 billion or $1.47 per share in the year-ago quarter.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $1.20 per share for the quarter. Analysts' estimates typically exclude one-time items.

Adjusted results for the quarter were lower compared to last year, primarily due to lower realized prices and higher operating costs associated with increased turnaround activity, partially offset by higher volumes.

Total revenues and other income for the quarter declined 16 percent to $12.92 billion from $15.47 billion in the same quarter last year, and missed analysts' consensus estimate of $13.63 billion for the quarter.

Production from continuing operations for the quarter, excluding Libya, increased 25 MBOED from the year-ago period to 1,473 MBOED. The net increase reflects 62 MBOED, or 4 percent growth, partly offset by 37 MBOED from higher downtime.

Growth was primarily due to new production from development programs and major projects, partially offset by normal field decline. Eagle Ford and Bakken combined production increased by 33 percent compared with the year-ago quarter.

The company's total realized price in the quarter was $64.78 per barrel of oil equivalent or BOE, down 7 percent from $69.68 per BOE in the prior-year quarter, reflecting lower average realized prices across all products.

Looking ahead to the fourth quarter, ConocoPhillips now forecasts production in a range of 1,545 to 1,575 MBOED, down from the prior range of 1,590 to 1,640 MBOED.

The revised outlook reflects anticipated impacts from the absence of ramp gas sales from Australia's APLNG to a third-party LNG project, temporary third-party infrastructure constraints in Malaysia and value-driven ethane rejection in the Lower 48.

For fiscal 2014, ConocoPhillips now projects production from continuing operations, excluding Libya, in a range of about 1,525 to 1,535 MBOED. The company said it is on track to achieve 3 to 5 percent volume and margin growth in 2014.

COP closed Wednesday's trading at $70.75. In Thursday's pre-market activity, the stock is up $0.17 or 0.24 percent to $70.92.