Norwegian energy company Equinor is bracing for a significant decline in its Q3 results, largely attributed to extraordinary gas prices following Russia's invasion of Ukraine and unplanned production outages. The adjusted earnings are forecasted to fall to $7.59 billion from $24.3 billion. Additionally, net profit is predicted to decline to $2.24 billion from $6.72 billion, and revenue is expected to drop by 45% to $24 billion.
The company's daily production experienced a decline of approximately 60,000 barrels of oil equivalent due to unplanned outages. This has positioned the production outlook as a central topic on the upcoming earnings call. Despite stronger liquid prices, Equinor faced weaker Norwegian gas prices in Q3, as highlighted by RBC Capital Markets analyst Biraj Borkhataria.
Looking ahead, Equinor's guidance for organic capital expenditure averages between $10 billion and $11 billion for 2023, and around $13 billion for 2024-26. Even with the anticipated Q3 earnings drop, the company has maintained its quarterly dividend at $0.30 and declared an extraordinary dividend of $0.60. Moreover, plans are underway to initiate the third tranche of share buybacks worth $1.67 billion.
Despite these financial adjustments, Equinor remains optimistic about its capital distributions for the year. The energy giant still anticipates total capital distributions of $17 billion this year.
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