Eni SpA (E) reported a significant decline in earnings and revenues in the fourth quarter of 2023. With diluted earnings per share dropping from 21 cents to 5 cents in the year-over-year comparison, the total quarterly revenues also plummeted from €31.8 billion to €25 billion.
Operational Performance
Eni SpA operates through four business segments, namely Exploration & Production, Global Gas & LNG Portfolio, Enilive Refining and Chemicals, and Plenitude & Power.
Exploration & Production
The total oil and gas production in the fourth quarter saw an increase of 6% from the prior-year quarter. However, despite this growth, lower liquid and natural gas price realization impacted the segment, resulting in a profit decline from €2.9 billion to €2.4 billion.
Global Gas & LNG Portfolio
Eni’s natural gas sales decreased by 12% year over year in the reported quarter. Although the Global Gas & LNG Portfolio segment reported an adjusted operating profit of €677 million, this increase was predominantly due to a positive outcome of an arbitration procedure.
Enilive, Refining and Chemicals
For the fourth quarter, Eni reported a significant loss in this segment, primarily due to lower demand and increased costs for energy supplies in Europe. The segment’s adjusted operating loss amounted to €87 million.
Plenitude & Power
Retail gas sales and power sales within this segment experienced year-over-year declines, contributing to a 6% decrease in profits, amounting to €111 million from this segment.
Financials
As of Dec 31, Eni had a long-term debt of €21.7 billion, while their cash and cash equivalents amounted to €10.2 billion. Furthermore, net cash generated by operating activities was €4.2 billion, with capital expenditure totaling €2.7 billion.
Stocks to Consider
Eni currently carries a Zack Rank #3 (Hold). Investors interested in the sector might look at the following companies that presently hold a Zacks Rank #1 (Strong Buy).
Equitrans Midstream (ETRN), Energy Transfer (ET), and Subsea 7 S.A. (SUBCY) stand out with their positive estimated earnings growth, making them potential options for investment.
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