Top Stories
Buyback disappointment takes shine off TotalEnergies’ Q2 profits
Published by Jessica Weisman-Pitts
Posted on July 28, 2022
Global Banking and Finance Review
Company
Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
Published by Jessica Weisman-Pitts
Posted on July 28, 2022
PARIS (Reuters) -TotalEnergies posted a surge in second-quarter profits, joining others in its sector that have benefited from higher energy prices, although its shares fell as its stock buyback plans disappointed some analysts and investors.
Adjusted net income nearly trebled from a year ago to $9.8 billion, as the company cashed in on a rise in energy prices driven by Russia’s invasion of Ukraine.
TotalEnergies’ shares fell by more than 3% – in contrast to rival Shell https://www.reuters.com/business/energy/shell-reports-record-profit-115-billion-2022-07-28 whose shares rose after it reported a leap in profits.
Analysts and investors said TotalEnergies’ plans for more share buybacks of up to $2 billion in the third quarter looked conservative.
“TotalEnergies leaves the buyback unchanged at $2 billion in Q3 despite improving cash flow generation. We expected a 50% increase quarter-on-quarter to $3 billion, which we saw as fairly consensual,” Jefferies analyst Giacomo Romeo said.
ClairInvest fund manager Ion-Marc Valahu, who sold his TotalEnergies’ shares in June after a rally in the stock, said the second quarter figures were not enough to encourage him to buy back into the stock.
“Blowout numbers on all segments as expected given the energy situation. I have sold my position in June given the huge run up in the stock over the last year. We will come back to the stocks after a period of consolidation,” Valahu said.
RISK OF SUPERTAX?
A rapid recovery in demand, following the end of pandemic lockdowns, and the surge in energy prices as energy exporter Russia’s invasion of Ukraine disrupted markets, have boosted profits for many of the world’s top oil companies.
Shell on Thursday also reported a second quarter profit of $11.5 billion, smashing a previous record hit just three months earlier, lifted by a tripling of refining profits and strong gas trading.
Exxon https://www.reuters.com/article/exxon-mobil-estimates-idAFL1N2YM137 earlier this month had also said it could post its strongest quarter yet, with profit potentially surpassing $16 billion, almost twice its first-quarter earnings.
However, Valahu and other fund managers said that meant there was still a risk that the French government may eventually impose a windfall tax on TotalEnergies. Britain, home to Shell and BP, imposed a 25% windfall tax https://www.reuters.com/article/britain-economy-idAFL5N2XI0ZO in May.
“The market may also be worried by the risk that the government may impose later this year a tax on companies with especially large profits,” Apicil Asset Management fund manager Gregoire Laverne, who holds TotalEnergies’ shares, said.
(Reporting by Benjamin Mallet and Sudip Kar-Gupta; editing by Barbara Lewis)