Italian Oil Giant Eni Reports Profit Meets Estimates 

(Bloomberg) -- Eni SpA’s third-quarter profit almost matched estimates as higher oil and natural gas production helped counter a drop in prices.

• Adjusted net income was 776 million euros ($862 million), compared with an average analyst estimate of 778.6 million euros in a Bloomberg survey.

Key Insights

• The Italian giant opens what should be a broadly weaker third quarter for Europe’s integrated oil majors, according to Bloomberg Intelligence. Prices for both gas and oil were lower in the period as a slowing economy affected demand growth.
• At Eni, total oil and gas production averaged 1.89 million barrels a day, just exceeding the average analyst estimate of 1.875 million and beating year-earlier output of 1.8 million.
  • That reflects start-ups and ramp-ups in Egypt, Libya, Ghana, Angola, Mexico and Algeria.
  • The company remains on track to achieve its forecast of 2%-2.5% annual growth, or 1.88 million barrels a day.
• That growth, together with better cash flow, will allow Eni to finance its planned dividend, forecast at 3.4 billion euros, according to a company statement.

Market Reaction

• Eni slipped 0.3% to 14.10 euros at 9:25 a.m. in Milan trading. Brent crude was down by the same amount.
• The results show “good growth” in production volumes, Jason Kenney, an analyst at Banco Santander SA, said in a note. There’s “good reason for confidence in Eni,” Kenney said, reiterating his buy rating.

Know More

• Adjusted net income in the third quarter was lower than the 1.39 billion euros posted a year earlier, but higher than the second quarter’s 562 million euros.
• While the production outlook was maintained, Eni tweaked guidance in downstream, forecasting a refinery break-even margin at around $5.20 a barrel this year amid an “unfavorable trading environment.”
  • At the budgeted scenario and at full capacity, the margin would be $3.50 at the end of 2019, it said.
• To see a more detailed rundown of Eni’s earnings, click here.

To contact the reporter on this story: Chiara Albanese in Rome at calbanese10@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Amanda Jordan, Christopher Sell

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