TotalEnergies SE TTE has reported its fourth-quarter 2023 operating earnings of $2.16 (€2.02) per share, marking an 8.1% shortfall from the Zacks Consensus Estimate of $2.35. The 27% decline from the year-ago figure of $2.97 (€2.93) can be attributed to a correction in commodity prices. However, TotalEnergies managed to generate earnings per share of $8.67 for the entire 2023, reflecting a robust 10.5% increase from the previous year.
Total Revenues Fall Short
The energy giant’s total revenues for the fourth quarter amounted to $54.7 billion, missing the Zacks Consensus Estimate of $55.1 billion by 0.7%. The annual comparison also yielded a decline, with total revenues for 2023 reaching $237.1 billion, down 15.6% from the $280.9 billion generated in 2022.
Production Declines and Realized Prices
During the fourth quarter, hydrocarbon production averaged 2,462 thousand barrels of oil equivalent per day, representing a 12% decline year-over-year. The decrease was attributed to the disposal of Canadian oil sands in the same period. Liquids production averaged 1,506 thousand barrels per day, down 4% from the year-ago period, while quarterly gas production declined by 23% year-over-year to 5,158 thousand cubic feet per day.
Furthermore, realized prices for Brent and other energy sources also dwindled during the quarter. The realization of Brent prices decreased by 5% to $84.3 per barrel. The average realized liquid price was $80.2 per barrel, down 1% from the previous year’s figure. Additionally, realized gas and LNG prices also experienced significant declines.
Operational Highlights and Financial Update
While TotalEnergies continued its multi-energy strategy during the fourth quarter and extended partnerships with key players, its net operating income decreased by 31% to $5,724 million from the year-ago period. Interest expenses also declined by 8% to $660 million. In addition, TotalEnergies made significant asset acquisitions and sales, highlighted by the repurchase of 142.6 million shares in 2023 for $9 billion.
Segmental Performance and Future Projections
The company’s different business segments witnessed varied operating income performances, with some experiencing significant declines from the prior-year period. TotalEnergies expects first-quarter 2024 hydrocarbon production to surpass 2.4 Mboe/d, signifying positive momentum for the company in the forthcoming period. The company also outlined its investment and share buyback plans for 2024.
Comparative Analysis with Industry Peers
In comparison to industry peers like Exxon Mobil Corporation, Chevron Corporation, and Hess Corporation, TotalEnergies’ Q4 2023 financial results demonstrate a different trajectory. While Exxon Mobil and Chevron Corporation reported earnings that surpassed the Zacks Consensus Estimate, TotalEnergies’ performance lags behind. Market participants eagerly anticipate how these financials will impact the respective stock performances of these energy behemoths.
Despite the variance in performance, the future outlook for the energy sector promises opportunities where strong gains could be imminent for those wise enough to hedge their bets in the right stocks. TotalEnergies’ Q4 2023 financials may have missed the mark, but turning one’s back on its potential might not be the wisest move.
In Conclusion
As an experienced investor, it is crucial to weigh the various angles and consider the implications of such financial results. TotalEnergies SE might not have met the market’s expectations in its Q4 performance, but this doesn’t necessarily indicate a doomed future for the energy heavyweight. Investors should keep a close eye on how the company navigates the upcoming quarters and whether it can realign its trajectory with market expectations.
