Equinor first-quarter profit rises more than expected
Equinor's First-Quarter 2024 Financial Performance
OSLO, May 6 (Reuters) - Equinor on Wednesday reported a bigger-than-expected rise in first-quarter profits, lifted by record output and as oil and gas prices soared in March due to the war in the Middle East.
Financial Highlights and Analyst Expectations
The Norwegian energy group's adjusted earnings before tax for January-March rose to $9.77 billion from $8.65 billion a year earlier, beating the $9.0 billion predicted in a poll of 23 analysts compiled by Equinor.
CEO Statement
"This quarter, we deliver exceptional operational performance and record-high production... Combined with higher prices, we present strong financial results," CEO Anders Opedal said in a statement.
Shareholder Returns and Buyback Policy
Equinor maintained a decision from February to reduce its share buybacks by 70% this year, despite the prospect of windfall profits stemming from Middle East supply disruptions, and kept its regular quarterly cash dividend at $0.39 per share.
Stock Performance
The shares of majority state-owned Equinor are up 62% year-to-date, outperforming a 37% increase in European energy stocks, reflecting its position as a major supplier of oil and gas to Europe and with no direct exposure to the Middle East.
Divisional Performance
Downstream Division
The downstream division, which includes energy trading, reported a profit of $787 million, exceeding the $693 million expected by analysts and beating the unit's $400 million long-term quarterly guidance.
Market Environment
Oil and Gas Prices
Brent crude futures have climbed well above $100 per barrel since the outbreak of the Iran war after trading between $60 and $70 for much of the past 12 months, and the spot price for physical delivery has risen even more.
European Gas Market
Europe's benchmark gas price has also risen sharply, and is now trading around 50% higher after as Qatar is prevented from delivering liquefied natural gas (LNG).
Production Levels
Equinor produced a record 2.31 million barrels of oil equivalent per day (boed) in the first quarter, up from 2.12 million boed a year earlier and beating the 2.22 million forecast by analysts.
(Reporting by Nerijus Adomaitis and Nora Buli, editing by Terje Solsvik)
