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ConocoPhillips (COP) Posts Lower-than-Expected Loss in Q1

ConocoPhillips COP reported first-quarter 2016 adjusted loss of 95 cents per share, narrower than the Zacks Consensus Estimate of a loss of $1.07. The year-ago-quarter adjusted profit was 18 cents per share. 

Revenues in the reported quarter decreased to $5,015 million from the year-ago level of $8,002 million. Moreover, revenues missed the Zacks Consensus Estimate of $5,568 million.

Exploration and Production

Daily production, from continuing operations, averaged 1.578 million barrels of oil equivalent (MMBOE) in the quarter, down from 1.610 MMBOE in the year-ago quarter.

Price Realization

Average realized price for oil was $31.47 per barrel compared with $48.05 in the year-earlier quarter. Natural gas liquids were sold at $12.30 per barrel, down from the year-ago level of $19.60 per barrel. The price of natural gas was $2.99 per thousand cubic feet as against $4.72 in first-quarter 2015.

Financials

In the first quarter, ConocoPhillips generated $421 million in cash from continuing operating activities. As of Mar 31, 2016, the company had total cash and cash equivalents of $4,866 million and $29,455 million in debt, with a debt-to-capitalization ratio of 43%.

ConocoPhillips incurred $1,821 million in capital expenditures during the quarter.

Guidance

For 2016, ConocoPhillips has reduced its capital expenditure guidance to $5.7 billion from $6.4 billion. The decrease is mainly attributable to reduced deepwater exploration activity, deferrals and lower costs across the portfolio. The company expects to meet its full-year production guidance of about 1,525 MBOED. For the second quarter, production from continuing operations is expected at 1,500–1,540 MBOED.

The company expects to spend roughly $11.5 billion this year. However, the spending might be reduced after the most important projects become operational and operations in the unconventional resources of North America are withdrawn.

The company expects 2016 operating costs to be $7.0 billion, corporate segment net expenses of $1.0 billion, depreciation, depletion and amortization costs of $8.5 billion and exploration dry hole and leasehold impairment expenses of $0.8 billion.

Zacks Rank

ConocoPhillips currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are ReneSola Ltd. SOL, FutureFuel Corp. FF and Braskem S.A. BAK. All the stocks sport a Zacks Rank #1 (Strong Buy).

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BRASKEM SA (BAK): Free Stock Analysis Report
 
CONOCOPHILLIPS (COP): Free Stock Analysis Report
 
RENESOLA LT-ADR (SOL): Free Stock Analysis Report
 
FUTUREFUEL CORP (FF): Free Stock Analysis Report
 
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