Valero
Given the poor performance of the downstream businesses of Chevron and ExxonMobil, one would expect a poor quarter from refiner Valero. Indeed, total revenues fell 8.2% to $24.3 billion, compared to $26.4 billion in the prior-year quarter. Earnings fell to $0.34 per share, which was down from $1.00 a share a year ago, but significantly better than the consensus estimate of $0.20 a share.
The earnings beat was attributed to higher average ethanol production volumes and the expansion of the company’s Diamond Green Diesel plant.
Refining margin per barrel of decreased to $7.97 from the year-ago level of $8.65. Refining operating expense per barrel increased to $4.15, versus $3.83 in the year-ago quarter.
Refinery capacity utilization for the quarter was 91%, with throughput volumes declining 66,000 barrels per day from the prior year to 2.9 million barrels per day.
Investors were pleased with the results, as the share price jumped 3.5% following the earnings release. Valero also announced a quarterly dividend of $0.90 per share, which translates to a forward annualized yield of 3.97%.
ConocoPhillips
ConocoPhillips is the world’s largest independent pure oil and gas producer, and the company’s earnings are a bellwether for the upstream segment.
During the first quarter, ConocoPhillips reported earnings per share of $1.00, beating the consensus estimate of $0.92 per share. This marked the fourth straight quarter ConocoPhillips has surpassed consensus estimates. Total earnings for the quarter were $1.1 billion.
Total production excluding Libya for the first quarter of 2019 was 1.318 million barrels of oil equivalent per day, an increase of 7.7% compared with the same period a year ago. Production in the Lower 48 Big 3 unconventional plays (Permian, Eagle Ford, and Bakken) grew by 30% year-over-year.
ConocoPhillips generated $2.9 billion in cash from operations (CFO), which was more than enough to cover capital expenditures and investments ($1.6 billion), share repurchases ($0.8 billion) and dividends ($0.3 billion). During the quarter, 37% of CFO generated was returned to shareholders. At the end of the quarter, the company had on hand $6.7 billion of cash and short-term investments.
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