ConocoPhillips (COP) Beats on Q3 Earnings, Hikes Dividend

ConocoPhillips COP has reported third-quarter 2023 adjusted earnings per share of $2.16, beating the Zacks Consensus Estimate of $2.04. The bottom line declined from the prior-year quarter’s $3.60 per share.

One of the world’s leading independent oil and gas producers headquartered in Houston, TX, ConocoPhillips’ quarterly revenues of $14,866 million decreased from the third-quarter 2022 figure of $21,614 million. The top line also missed the Zacks Consensus Estimate of $15,319 million.

Higher oil equivalent production volumes have led to better-than-expected quarterly earnings. The positives were partially offset by lower average realized oil equivalent prices.

ConocoPhillips Price, Consensus and EPS Surprise

 

ConocoPhillips Price, Consensus and EPS Surprise

ConocoPhillips price-consensus-eps-surprise-chart | ConocoPhillips Quote

Dividend Hike

ConocoPhillips has announced a quarterly ordinary dividend of 58 cents per share, indicating a 14% increase from the last paid dividend. The dividend is payable on Dec 1, 2023, to stockholders of record at the close of business on Nov 14, 2023.

Production

Total production averaged 1,806 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago quarter’s 1,754 MBoe/d. The metric also beat our estimate of 1,801.5 MBoe/d. Of the total output, 51.3% was crude oil. Overall production was higher than the year-ago period primarily due to the increased production in the Lower 48.

ConocoPhillips’ crude oil production increased to 927 thousand barrels per day (MBbls/d) from the year-ago quarter’s 895 MBbls/d and beat our estimate of 905 MBbls/d.

The production of natural gas liquids totaled 291 MBbls/d, higher than the year-ago period’s 271 MBbls/d. The metric is above our projection of 285.6 MBbls/d.

Bitumen production for the quarter was 64 MBbls/d, down from the 69 MBbls/d reported in the year-ago quarter and missing our estimate of 71.8 MBbls/d.

The company’s natural gas production was 3,141 million cubic feet per day (MMcf/d), higher than the year-ago level of 3,113 MMcf/d.

Realized Prices

Average realized oil equivalent prices declined to $60.05 per barrel from the year-ago level of $83.07.

The average realized crude oil price for the third quarter was $83.15 per barrel, reflecting a decrease from the year-ago figure of $97.56. The metric is slightly above our projection of $81.52.

The average realized natural gas price was $5.06 per thousand cubic feet, down from the $13.04 reported in the year-ago quarter.

Realized natural gas liquids price declined to $23.01 per barrel from the year-ago quarter’s $35.47 and lagged our projection of $25.48.

Total Expenses

ConocoPhillips’ third-quarter total expenses declined to $10,766 million from $14,174 million in the corresponding period of 2022. The metric is also below our projection of $12,211.6 million. The cost of purchased commodities fell to $5,543 million from $9,251 million.

However, exploration costs increased to $92 million in the September-end quarter of 2023 from $89 million in the comparable period of 2022.

Production and operating expenses rose to $1,995 million in the reported quarter from $1,799 million a year ago.

Balance Sheet & Capital Spending

As of Sept 30, 2023, ConocoPhillips had $8,830 million in cash and cash equivalents. The company had a total long-term debt of $18,182 million. At the third-quarter end, it had a short-term debt of $881 million.

Capital expenditure and investments totaled $2,545 million. Net cash provided by operating activities was $5,445 million.

Guidance

For 2023, ConocoPhillips increased its total production to 1.82 million barrels of oil equivalent per day (MMBoe/d) from the prior stated 1.80-1.81 million barrels of oil equivalent per day (MMBoe/d). For the fourth quarter, COP expects production between 1.86 MMBoe/d and 1.90 MMBoe/d.

Zacks Rank & Other Stocks to Consider

ConocoPhillips currently carries a Zacks Rank #2 (Buy).

Investors interested in the energy sector may look at some other top-ranked companies mentioned below. The three companies presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Liberty Energy Inc. LBRT reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 74 cents. The Denver, CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.

Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable Dec 20, 2023, to stockholders of record as of Dec 6, 2023. The dividend increased 40% from the previous quarter’s level.

Matador Resources Company MTDR reported third-quarter 2023 adjusted earnings of $1.86 per share, which beat the Zacks Consensus Estimate of $1.59. MTDR’s milestone led to better-than-expected third-quarter results, with the highest-ever total production averaging more than 135,000 barrels of oil and natural gas equivalent per day.

For the fourth quarter of 2023, Matador expects an average daily oil equivalent production of 145,000 BOE. The recent guidance indicates a 2% upward revision from the prior mentioned 143,000 BOE/D.

Oceaneering International OII reported a third-quarter 2023 adjusted profit of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. This outperformance was largely due to robust results in certain segments.

For 2023, Oceaneering projects a consolidated EBITDA of $275-$295 million and a continued free cash flow of $90-$130 million.

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