Yahoo Finance Imperial Oil (IMO) Down 4.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Imperial Oil (IMO). Shares have lost about 4.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Imperial Oil due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Imperial Oil Q4 Earnings Beat, Revenues Lag Estimates
Imperial Oil reported fourth-quarter 2022 adjusted earnings per share of $2.11, which beat the Zacks Consensus Estimate of $1.84. This was due to higher contributions from the company's downstream segment, driven by higher volumes and improved margins. Moreover, the bottom line improved significantly from the year-ago quarter’s profit of 94 cents per share.
However, the Canadian integrated oil and gas player’s quarterly revenues of $10.7 billion underperformed the Zacks Consensus Estimate of $13.2 billion. However, the top line rose from the year-ago quarter’s sales of $9.8 billion. The disappointment versus the consensus mark could be blamed on lower production during the period.
Imperial Oil announced a first-quarter dividend of 44 Canadian cents per share, payable on Apr 1, 2023, to shareholders of record at the close of the business on Mar 3, 2023.
Segmental Information
Upstream: Revenues of C$4,332 million increased from the prior-year level of C$4,252 million. However, the segment reported a net income of C$531 million, less than the year-ago quarter’s figure of C$545 million. This decrease was due to lower gross volumes and lower conventional crude oil realizations in the reported quarter.
During the quarter under review, gross production volumes averaged 441,000 barrels of oil equivalent per day (Boe/d), down from 445,000 Boe/d in the year-ago quarter. The total oil and NGL output amounted to 435,000 barrels per day (bpd) compared with 425,000 bpd in the fourth quarter of 2021.
Net oil and NGL output from Kearl and Cold Lake totaled 184,000 bpd and 105,000 bpd respectively. Syncrude output averaged 77,000 bpd, up from the year-ago level of 68,000 bpd. Net natural gas production came in at 37 million cubic feet per day (Mcf/d), lower than 112 Mcf/d in the last year’s comparable quarter.
Bitumen price realizations totaled C$59.85 per barrel, down from C$65.53 in the year-ago quarter. IMO received an average realized price of C$115.22 per barrel of synthetic oil compared with the year-ago quarter’s C$92.54.
Imperial Oil received C$67.91 per barrel for conventional crude oil, compared with the year-ago quarter’s C$70.09. The price of gas rose to C$5.54 per thousand cubic feet.
Downstream: Revenues of C$14,453 million increased from C$12,312 million, recorded in the fourth quarter of 2021. Moreover, the segment earned a net income of C$1,188 million compared with C$250 million in the year-ago quarter, due to higher refinery throughput and improved margins. The improved margins were a result of higher demand for refined products.
The refinery throughput in the fourth quarter averaged 433,000 bpd, higher than the prior-year level of 416,000 bpd due to a reduction in planned maintenance activity and improved reliability at the company's refineries. Additionally, the refineries operated at high utilization rates during the quarter, which also contributed to the increased throughput.
Chemical: Revenues of C$422 million decreased from C$449 million, recorded in the fourth quarter of 2021. The net income for this segment was recorded at C$41 million, down from C$64 million in the year-ago quarter.
Total Costs & Capex
Total expenses of C$12,174 million increased from the year-ago quarter’s C$11,201 million.
In the quarter under consideration, Imperial Oil’s capital and exploration expenditures totaled C$488 million, higher than the year-ago quarter’s C$441 million.
Financial Performance
Imperial Oil’s cash flow from operating activities was C$2,797 billion in the reported quarter. In the year-ago period, cash flow from operating activities had come in at C$1,632 billion. Meanwhile, IMO’s free cash flow in the fourth quarter of 2022 totaled C$2,324 billion.
In the reported quarter, the company returned C$2,145 million to its shareholders. This amount included C$211 million in dividends paid and C$1,934 million in share repurchases. The share repurchases were made through its normal course issuer bid and the completion of a C$1,500 million substantial issuer bid program in December.
As of Dec 31, 2022, Imperial Oil held C$3,749 billion in cash and cash equivalents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Imperial Oil has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Imperial Oil has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Imperial Oil Limited (IMO) : Free Stock Analysis Report
