Eni Climbs Most in 7 Months in Milan on Second-Half Outlook

Eni SpA (ENI), the Italian oil company that reported a slump in quarterly profit today, rose the most in seven months in Milan trading after forecasting a “significant improvement” in its second-half results.

Eni climbed 3.3 percent, the biggest gain since Jan. 2, to 17.15 euros. Adjusted net income fell 55 percent in the second quarter to 576 million euros ($762 million), Eni said in a statement, citing a weaker European market, disruption in Africa and lower earnings at its Saipem unit. That missed the 763.5 million-euro mean estimate of 14 analysts surveyed by Bloomberg.

“First-half results were affected by a difficult economic situation across Italy and Europe, production interruption in Libya and Nigeria and by the fall in Saipem’s results,” Chief Executive Officer Paolo Scaroni said in the statement. “We expect a significant improvement in our second-half results.”

The gain in Eni’s shares contrasts with Royal Dutch Shell Plc (RDSA), whose stock declined 4.7 percent today after the company reported lower-than-expected earnings. While both have struggled with falling oil prices and halts to production in Nigeria, Eni has managed to maintain quarterly output.

“If you adjust for Saipem, results were in line with expectations,” said Peter Hutton, an analyst at RBC Capital Markets in London. “It looks like a relatively competent performance and they have a base on which to build.”

Production, Sales

Eni produced 1.65 million barrels of oil a day in the second quarter, little changed from a year earlier. Production fell 2.7 percent in the first half. Quarterly sales slipped to 28.1 billion euros from 30.1 billion euros.

Eni said it expects full-year production to be in line with 2012 output, reducing earlier guidance for higher volumes. The Rome-based company is starting projects in Algeria, Angola and Kazakhstan and will increase output in Egypt.

Shell reported a 20 percent decline in second-quarter profit, citing output disruptions in Nigeria and charges related to its North American shale assets. BP Plc (BP/) also posted lower earnings this week following the decline in oil prices.

Brent crude averaged $103.35 a barrel in the second quarter, 5 percent lower than a year earlier.

To contact the reporters on this story: Alessandra Migliaccio in Rome at amigliaccio@bloomberg.net; Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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