Equinor Earnings Miss Amid Weaker Prices and Lower Production -- Earnings Review
October 24 2019 - 9:13AM
Dow Jones News
By Dominic Chopping
Equinor ASA (EQNR) reported results for the third quarter on
Thursday. Here's what we watched:
REVENUE FORECAST: Revenue fell 23% to $14.7 billion, against
FactSet analyst poll that was looking for $16.04 billion.
NET INCOME FORECAST: Equinor posted a net loss of $1.11 billion,
down from a profit of $1.67 billion a year earlier. Analysts polled
by FactSet had expected net profit of $1.06 billion. Adjusted
earnings fell 46% to $2.59 billion against expectations of $2.68
billion. It posted net impairments of $2.79 billion, provisions of
$560 million and changes in fair value of derivatives and inventory
hedge contracts of $444 million, with a positive gain from sale of
assets of $849 million. Provisions and impairments were related to
damage at its South Riding Point oil terminal in the Bahamas, in
addition to onerous contract provisions in North America, it
said.
WHAT TO WATCH:
PRODUCTION AND PRICES: Equinor said its earnings were weighed by
lower average prices and lower volumes for both liquids and gas, in
addition to impairment losses, mainly related to unconventional
onshore assets in North America. In response, the Norwegian
oil-and-gas major said it will now defer gas production to periods
with higher expected prices. Equinor delivered total equity
production of 1.909 million barrels of oil equivalent a day in the
third quarter, down from 2.066 million barrels a day in 2018. A
FactSet poll expected total production in the third quarter at
1.901 million barrels of oil equivalent a day.
GUIDANCE: The company still expects exploration spending of
around $1.7 billion and production around the 2018 level. For the
2019 to 2025 period, production growth is still expected from new
projects, resulting in a compound annual growth rate of around 3%.
Full-year organic capital expenditure is still seen at $10 billion
to $11 billion.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 24, 2019 08:58 ET (12:58 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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