HOUSTON - ConocoPhillips (NYSE: NYSE:COP), a global leader in exploration and production, reported a third-quarter 2024 earnings of $2.1 billion, or $1.76 per share. Despite a year-over-year dip from $2.8 billion, or $2.32 per share in 2023, the company announced a significant increase in its shareholder returns, including a 34% hike in its ordinary dividend to $0.78 per share and an expansion of its share repurchase authorization by up to $20 billion.
The company's adjusted earnings for the quarter, which exclude special items, were also $2.1 billion, or $1.78 per share, a decrease from the $2.6 billion, or $2.16 per share, recorded in the same period last year. The reduction in earnings was primarily attributed to lower realized prices for oil, which averaged $54.18 per barrel of oil equivalent (BOE), a 10% decrease from the third quarter of 2023.
ConocoPhillips' operational performance remained robust, with third-quarter production rising to 1,917 thousand barrels of oil equivalent per day (MBOED), an increase from the previous year's figure of 1,806 MBOED. The growth was partly due to a record production in the Lower 48 states, which reached 1,147 MBOED. This included contributions from the Permian, Eagle Ford (NYSE:F), and Bakken regions.
In terms of financial health, the company generated cash provided by operating activities of $5.8 billion and cash from operations (CFO) of $4.7 billion. The quarter also saw ConocoPhillips distribute $2.1 billion to shareholders through a combination of share repurchases and dividends.
Looking ahead, ConocoPhillips anticipates closing the planned acquisition of Marathon Oil , expecting to exceed initial synergy guidance of $500 million. The company also projects fourth-quarter 2024 production to be between 1.99 and 2.03 million barrels of oil equivalent per day (MMBOED), with full-year production expected to be approximately 1.94 to 1.95 MMBOED.
The increased returns to shareholders and the company's strong operational performance, despite the backdrop of lower oil prices, signal ConocoPhillips' commitment to delivering value. The company's strategic moves, including the Marathon Oil acquisition and the expansion of its share repurchase program, are poised to further solidify its market position.
This news article is based on a press release statement and aims to present the facts without bias or promotional language.
In other recent news, ConocoPhillips has experienced a series of noteworthy developments. The company has received an Overweight rating from Piper Sandler with a price target of $135.00, and a Neutral rating from Mizuho with a price target of $129.00. Piper Sandler's revised earnings per share (EPS) estimate for ConocoPhillips stands at $1.61, and Mizuho's at $1.62, both influenced by recent commodity pricing and operational adjustments.
ConocoPhillips also received an Overweight rating from JPMorgan (NYSE:JPM), highlighting the company's potential to return $9 billion to shareholders in 2024, potentially increasing to $11 billion following a merger with Marathon Oil Corporation (NYSE:MRO). This merger has received shareholder approval and is awaiting regulatory approval and customary closing conditions.
In addition, the company has disclosed payments exceeding $42 billion to foreign governments under a new Securities and Exchange Commission regulation. Furthermore, the Public Utility Commission of Texas has approved the Permian Basin Reliability Plan. Lastly, Nelda J. Connors has been appointed to the ConocoPhillips board of directors. These are the most recent developments in the company's ongoing operations.
InvestingPro Insights
ConocoPhillips' recent financial performance and strategic moves align with several key insights from InvestingPro. Despite the reported year-over-year dip in earnings, the company's financial health remains robust, as evidenced by its ability to increase shareholder returns and expand its share repurchase program.
InvestingPro data shows that ConocoPhillips has a market capitalization of $119.59 billion, reflecting its significant presence in the Oil, Gas & Consumable Fuels industry. The company's P/E ratio of 11.43 suggests that it may be undervalued compared to its peers, which could explain the company's confidence in increasing its share repurchase authorization.
One InvestingPro Tip highlights that ConocoPhillips has maintained dividend payments for 54 consecutive years, underscoring the company's commitment to shareholder returns even in challenging market conditions. This is particularly relevant given the recent 34% hike in its ordinary dividend announced in the earnings report.
Another InvestingPro Tip indicates that the company's cash flows can sufficiently cover interest payments, which aligns with the reported $5.8 billion in cash provided by operating activities. This financial stability supports ConocoPhillips' ability to pursue strategic initiatives like the planned acquisition of Marathon Oil.
It's worth noting that InvestingPro offers 8 additional tips for ConocoPhillips, providing investors with a more comprehensive analysis of the company's financial health and market position. These insights can be particularly valuable for those looking to make informed decisions in the dynamic oil and gas sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.