Conoco Second-Quarter Profit Beats Estimates
ConocoPhillips (COP), the largest independent U.S. oil and natural gas producer, raised its full-year production forecast as it reported second-quarter profit that surpassed estimates.
Net income dropped to $2.05 billion, or $1.65 a share, from $2.27 billion, or $1.80, a year earlier, Houston-based ConocoPhillips said in a Business Wire statement today. Excluding certain one-time items, per-share profit was 12 cents higher than the $1.29 average of 21 analysts’ estimates compiled by Bloomberg.
The global explorer has been selling assets for more than three years as it seeks to focus on its most profitable holdings. The company said in today’s statement it expects proceeds of about $9 billion this year from agreements to sell properties in Algeria, Nigeria and its stake in the Kashagan project in Kazakhstan.
ConocoPhillips had said previously that project maintenance and preparations to boost oil and gas production would lower output in the second and third quarters compared with the year’s first three months.
“This is really a transition year for the company,” Brian Youngberg, an analyst with Edward Jones in St. Louis, said in a phone interview before the results were released. “This should be the bottom and then they expect growth” in production. Youngberg has a hold rating on ConocoPhillips shares and owns none.
Second-quarter results don’t include earnings from refining, chemical and pipeline assets that were spun off to form Phillips 66 (PSX) in 2012, compared with a month of such results in the year-earlier period.
Brent crude futures, a global benchmark, declined 5 percent from a year earlier to average $103.35 a barrel in the second quarter. Gas futures traded in New York averaged $4.018 per million British thermal units in the quarter, a 71 percent rise from a year earlier.
ConocoPhillips is the largest U.S. oil and gas producer that doesn’t own refineries or a chemical business, based on market value.
(ConocoPhillips is scheduled to hold an earnings conference call at 1 p.m. New York time, accessible at www.conocophillips.com)
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