Conoco Profit Meets Estimates as Production Declines
ConocoPhillips (COP), the largest independent U.S. oil and natural gas producer, reported first- quarter profit that met analysts’ estimates as output fell.
Profit excluding one-time items matched the $1.42 average of 20 estimates compiled by Bloomberg. Net income declined to $2.14 billion, or $1.73 a share, from $2.94 billion, or $2.27, a year earlier, the Houston-based company said in a Business Wire statement today.
Today’s results don’t include earnings from refining, chemical and pipeline assets that were spun off in April 2012, to create Phillips 66. (PSX) The spinoff was part of the company’s effort to boost returns by focusing on the most profitable holdings. ConocoPhillips has announced about $12 billion in planned asset sales since the start of last year, exceeding a target of as much as $10 billion for 2012 and 2013 combined.
Shrinking the company may help with future growth, said Fadel Gheit, an analyst with Oppenheimer & Co. in New York. “The smaller the company, usually the higher the probability that they can increase production” meaningfully, Gheit, who has an outperform rating on ConocoPhillips’ shares, said in a phone interview before the results were released.
In January, the company said oil and gas production may reach a low point this year as it completes a multi-year restructuring and asset sale program.
The earnings statement was issued before the opening of regular trading on U.S. markets. ConocoPhillips rose 0.8 percent to $58.26 yesterday at the close in New York.
ConocoPhillips is the largest U.S. oil and gas producer that doesn’t own refineries or a chemical business, based on market value.
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