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Total posts Q3 earnings beat on strong cost-cutting measures

Published 10/28/2016, 07:59 AM
Total posts Q3 earnings beat on strong cost-cutting measures
  • Total posted adjusted Q3 earnings of $2.07B, beating analyst consensus as deep cost cuts and increased production offset weak oil prices and a decline in refining margins.
  • However, Q3 revenue fell 8% to $37.4B from $40.6B a year ago, yet analysts had expected revenues of $32.6B.
  • Already carrying out a widespread cost-cutting program that has reduced operating cost per barrel to $6 from $9.9 in 2014, TOT says it is raising its cost-cutting target to $2.7B this year from $2.4B.
  • As it cuts costs, TOT nevertheless raised its Q3 production to 2.44M boe/day 2.34M boe/day in the year-ago quarter.
  • TOT also reaffirms its targets for 2017, including capex of $15B-$17B, and says it is on target to cover organic investment and dividend payments with $55/bbl oil.
  • Separately, TOT has agreed to take a 10% stake in Uganda’s planned $4B refinery, according to the country's energy minister.
  • Shares -0.4% premarket.

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