ConocoPhillips (COP) Tops Q1 EPS by 10c

ConocoPhillips (NYSE: COP) reported Q1 EPS of $1.00, $0.10 better than the analyst estimate of $0.90.

• Cash provided by operating activities was $2.9 billion. Excluding working capital, cash from operations (CFO) of $2.9 billion exceeded capital expenditures and investments, generating free cash flow of $1.3 billion.
• Repurchased $0.8 billion of shares and paid $0.3 billion in dividends funded entirely from free cash flow, representing a return of CFO to shareholders of 37 percent.
• First-quarter production excluding Libya of 1,318 MBOED; year-over-year underlying production grew 5 percent overall and 13 percent on a per debt-adjusted share basis.
• Grew production from the Lower 48 Big 3 unconventionals by 30 percent year-over-year.
• Ended the quarter with cash, cash equivalents and restricted cash totaling $6.5 billion and short-term investments of $0.2 billion, equating to $6.7 billion of ending cash and short-term investments.
• Received a ruling from the International Centre for Settlement of Investment Disputes (ICSID) ordering Venezuela to pay $8.7 billion for unlawful expropriation.
• Closed the sale of the Greater Sunrise Fields in April for $350 million before customary adjustments.
• Announced $2.7 billion United Kingdom divestiture agreement in April, plus interest and customary adjustments, subject to regulatory and other approvals.

“ConocoPhillips’ value proposition, priorities and portfolio are designed for the volatile environment that we believe has become the norm,” said Ryan Lance, chairman and chief executive officer. “We continue to execute and deliver on a plan that’s resilient to lower prices, while offering investors upside to higher prices. We approach the business with an aim to level-load our investment and distribution programs, rather than chase cycles up or down, because we believe that is the best way to create sustained value in the energy sector. By focusing on free cash flow generation and distributing a significant portion of cash flows to shareholders, we offer the market a path to value creation in this cyclical business.”

Lance continued, “At our Analyst & Investor Meeting in November we intend to showcase a decade-long plan based on our current portfolio with capital averaging less than $7 billion per year. At a reference price of $50 per barrel WTI, we expect our plan will generate absolute and per-share organic growth and return at least 30 percent of cash from operations to shareholders annually. We believe that our flexibility uniquely positions us to extend our successful strategy for many years, deliver free cash flow at less than $40 per barrel WTI and achieve superior returns across a range of prices.”

Outlook

Second-quarter 2019 production is expected to be 1,240 to 1,280 MBOED, reflecting the impact from seasonal turnarounds planned in Alaska, Canada and Europe. The guidance excludes Libya and does not include impacts from the recently announced U.K. divestiture agreement.

Full-year guidance for depreciation, depletion and amortization has been decreased to $6.1 billion, reflecting the held-for-sale impact of the U.K. divestiture agreement. The company’s other full-year guidance is unchanged and does not include impacts from the U.K. divestiture agreement.

For earnings history and earnings-related data on ConocoPhillips (COP) click here.

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