Husky Fourth-Quarter Earnings Miss Analysts' Estimates

Husky Energy Inc., the Canadian oil company controlled by Asia’s richest man, Li Ka-Shing, reported fourth-quarter profit and sales that missed analysts’ estimates on lower-than-expected refining margins.

Excluding hedging contracts and stock-based compensation, per-share profit was 50 Canadian cents, less than average of 12 estimates compiled by Bloomberg. Net income increased 16 percent to C$474 million ($475.2 million), or 48 cents a share, from C$408 million, or 42 cents, a year earlier, the Calgary-based company said in a statement today. Revenue rose 3.6 percent to C$5.67 billion, missing estimates.

“We expect Husky to trade in line with the broader energy group this morning given a mixed quarter,” said Greg Pardy, an analyst at RBC Capital in Toronto. “Weak downstream and operating netbacks were offset by higher production volumes and lower cash taxes.”

The downstream unit, which refines and processes crude, missed Pardy’s expected profit margins by 40 percent as operating costs were higher than expected, he said in a note to clients today. Revenue from the company’s upgrading unit, which processes oil-sands output into synthetic crude, fell 8.6 percent to C$562 million.

Production rose 12 percent to the equivalent of 319,300 barrels a day as Husky started two heavy-oil thermal projects, according to the statement.

Husky is 70 percent owned by Li, according to data compiled by Bloomberg. The company fell 1.5 percent to C$30.91 at 10:41 a.m. in Toronto. The shares have one buy, 16 hold and three sell recommendations from analysts and have risen 5.1 percent this year.

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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