Equinor is set to release its fourth-quarter results on Wednesday, providing insights into the company’s performance. Here’s a summary of what to expect:
Earnings Forecast
According to a consensus compiled by the company, adjusted earnings for the fourth quarter are expected to decrease significantly to $8.46 billion from $15.06 billion in the same period last year. This decline is primarily attributed to the sharp drop in European gas prices caused by a mild winter and high inventories.
Net Profit Forecast
A FactSet poll of 15 analysts suggests that Equinor’s net profit is projected to fall to $2.46 billion, down from $5.8 billion in the previous year.
Revenue Forecast
Analysts, based on a FactSet forecast, anticipate a 58% decrease in revenue to $27.09 billion compared to $34 billion in the previous year.
It’s worth noting that Equinor’s shares have risen by 1.9% over the past 12 months.
Key Points to Watch Out For:
To gain a comprehensive understanding of Equinor’s performance, pay attention to the following factors:
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Oil Price Performance vs. Visible Alpha Consensus: Despite Equinor’s recent update, Bank of America Securities highlights that the company’s guidance for achieved oil prices in the quarter remains below Visible Alpha consensus. This observation suggests potential deviations between Equinor’s actual earnings and market expectations.
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Midstream Business Earnings Guidance: Equinor’s earnings guidance for its midstream business falls within the lower end of its $400 million to $800 million range. This aspect might not be fully accounted for in the consensus. It is important to assess how this could impact the company’s overall financial performance.
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Organic Capital Expenditure and Production Growth: Equinor’s projected organic capital expenditure for 2023 is estimated to average between $10 billion and $11 billion, with an annual average of approximately $13 billion for 2024 to 2026. Additionally, the company anticipates around 1.5% production growth in 2023 compared to the 2022 level. These figures are key indicators of Equinor’s investment and growth plans.
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Shareholder Returns Guidance: UBS highlights that the report’s focus will be on Equinor’s guidance regarding shareholder returns. In 2023, the company delivered $17 billion in generous shareholder returns; however, lower cash flow generation resulting from the decline in European gas prices might lead to a substantial reduction in these returns. UBS forecasts a decrease to $12 billion in 2024 and $9 billion in 2025.
