BP (BP) reported mixed Q1 results early Tuesday, logging a massive profit for the quarter amid an even larger write down on assets in Russia. Shell (SHEL) and ConocoPhillips (COP) are on tap early Thursday. Oil stocks generally rose Wednesday.
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BP’s earnings received a sharp boost from the confluence of events that has pinned oil prices above $100 a barrel. While demand from China slows due to a prolonged lockdown in Shanghai, the EU is curbing Russian crude imports and mulling whether to completely ban Russian oil by year-end. And oil-producing members of OPEC+, which includes Russia, don’t appear eager to fill the gap.
That’s meant big profits for BP and other Western oil companies that have reported quarterly results so far this earnings season. Chevron (CVX) and Exxon Mobil (XOM) posted mixed results last week, while Devon Energy (DVN) and Diamondback Energy (FANG) topped views on Monday.
However, for the most part, they’ve opted to hike dividends and proceed with share buybacks while remaining cautious on spending in an inflation-fueled environment to increase oil production.
On Wednesday, Oneok (OKE) reported EPS of 87 cents on sales of $5.445 billion, and Cheniere Energy (LNG) posted a loss of $3.41 per share on revenue of $7.484 billion.
Meanwhile, several other energy plays are also reporting this week. Oasis Petroleum (OAS), Callon Petroleum (CPE), Laredo Petroleum (LPI) and Canadian Natural Resources (CNQ) will report Thursday.
U.S. crude oil prices jumped 5% to $107.60 a barrel on Wednesday.
BP Earnings
Estimates: Wall Street expected BP earnings per share to double to $18.64, while sales were seen jumping 70% to $44.669 billion.
Results: BP posted earnings of $25.56 a share. But BP also reported a $25.5 billion write-down related to assets in Russia, from which it was backing away due to international sanctions tied to Russia’s attack on Ukraine. Those assets primarily involve a nearly 20% stake in state-run oil producer Rosneft.
The company increased its share buyback initiative by $2.5 billion, following $1.6 billion in share repurchases during the first quarter. On the capital expenditures line, BP said it spent $2.9 billion during the first quarter, and held tight to prior spending projections for the year of $14 billion to $15 billion.
Minus the one-time Russia-related charge, BP reported that its replacement cost — a net income figure that includes the value of stored oil as an asset — soared to $6.2 billion. That was far above consensus expectations of $4.5 billion, as well as year-ago replacement cost of $2.63 billion.
Stock: Shares rose 2.2% on Wednesday to $31.85, after jumping 8% in stock market trading Tuesday. BP stock gapped up above its 50-day moving average after earnings. Shares are in a consolidation with a 34.26 buy point, according to MarketSmith. Shares peaked at 34.16 on Feb. 11, then sold off in late February as Russia’s invasion began, and BP stock announced its intention to exit Rosneft.
Its relative strength line is ticking up again after sliding in mid February. BP’s RS Rating hit a new high of 90 out of a best-possible 99, while its EPS Rating is 74.
BP has posted five straight quarters of earnings and sales growth.
Shell Earnings
Estimates: FactSet analysts expect Shell to more than double earnings from the year-ago period to $2.20 a share. Sales are set to pop 46% to $81.456 billion.
Results: Check back Thursday.
Shell has already said its exit from Russia could cost it $4 billion to $5 billion in write-offs.
Stock: Shares gained 2.4% to 56.97 on Wednesday. SHEL stock peaked at 56.13 on Feb. 7, then sold off in late February as Russia’s invasion began.
Its RS line is ticking back upward, while its RS Rating sits at 94. Shell’s EPS Rating is 79.
ConocoPhillips Stock
Estimates: ConocoPhillips earnings are seen coming in at $3.17 vs. 69 cents a year ago, on sales of $17.321 billion, a 64% surge from the prior year’s quarter.
Results: Check back Thursday.
Stock: Shares jumped 5% to 103.86. COP stock is solidly back above its 50-day line. Conoco stock could have a proper base with a 107.62 buy point after this week.
Its relative strength line is also moving up again, holding around 3-year highs. ConocoPhillips shares have an RS Rating of 97 and an EPS Rating of 74.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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Source: https://www.investors.com/news/oil-majors-bp-shell-and-conocophillips-earnings-on-tap-amid-high-oil-prices/?src=A00220&yptr=yahoo