Imperial Oil 4Q Earnings Expected to Fall — Earnings Preview

By Robb M. Stewart

Imperial Oil is scheduled to report results for the fourth quarter before the market opens Friday. Here is what you need to know:

EARNINGS FORECAST: Analysts expect the Canadian energy company to report fourth-quarter net income of 1.22 billion Canadian dollars ($910.7 million), or C$2.14 a share, according to the mean forecast of analysts polled by FactSet. That compares with earnings of C$1.73 billion, or $2.86, a year earlier. On an adjusted basis, fourth-quarter per-share earnings are expected to be C$2.12.

REVENUE FORECAST: Revenue and other income is forecast by analysts at C$13.09 billion, which would mark a decline from C$14.45 billion in the final three months of 2022.

PRODUCTION FORECAST: Analysts have penciled in average production of 441,900 oil-equivalent barrels a day for the quarter. That compares with 441,000 gross barrels a year earlier.

WHAT TO WATCH

--Imperial Oil in December provided guidance for 2024, projecting capital spending of C$1.7 billion, upstream production of between 420,000 and 442,000 gross oil-equivalent barrels daily and refinery throughput of 385,000 to 400,000 barrels a day. Analysts will be watching for any adjustments to the targets and update on the company's plans to complete turnarounds all three refineries this year and has set an in-service date on a renewable diesel facility for early-2025.

--The market will be watching payouts given Imperial Oil's commitment to shareholder returns and after it completed a share repurchase of C$1.5 billion in December via a substantial issuer bid. That followed accelerated buybacks under a normal course issuer bid program that was completed in October. RBC Capital Markets has factored in a 10% dividend increase to an annualized rate of C$2.20 a share into its first-quarter 2024 estimates.

--Cost-cutting measures are in focus after Enbridge this week said it plans to cut about 650 jobs, or roughly 5% of its workforce, to help the company weather near-term challenges.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

January 31, 2024 14:23 ET (19:23 GMT)

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