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Key Takeaways
- Dropping natural gas prices likely reduced revenue and profit for ConocoPhillips Co.
- The Houston-based energy producer is expected to post a 19% decline in revenue and 22.5% drop in profit, according to analysts.
- Production at ConocoPhillips likely will increase again in 2024 amid forecasts for slightly higher natural gas prices.
A global slide in natural gas prices likely sliced revenue and profits for ConocoPhillips Co. ( COP ), which will report its fourth-quarter results on Thursday.
The Houston-based energy producer is expected to report quarterly earnings of $2.52 billion, or $2.12 per share, according to consensus estimates of analysts surveyed by Visible Alpha. That’s down 22.5% from $3.25 billion, or $2.61 per share, in the same period a year ago. Revenue likely fell 19% to $15.56 billion.
| ConocoPhillips Quarterly Earnings Outlook | |||
|---|---|---|---|
| Analyst Q4 Estimates | Q3 2023 | Q4 2022 | |
| Revenue | $15.56 billion | $14.87 billion | $19.26 billion |
| Diluted Earnings Per Share (EPS) | $2.12 | $2.33 | $2.61 |
| Net Income | $2.52 billion | $2.8 billion | $3.25 billion |
Source: VisibleAlpha
Key Metric
ConocoPhillips derives about 30% of its revenue from natural gas production and marketing, and gas prices have plummeted in the past year. Compared with a year ago, Visible Alpha expects the firm will report the average price it received for natural gas in the U.S. dropped 53% to $2.24 per thousand million British thermal units (MMBtu) during the quarter. Benchmark Henry Hub natural gas prices were 62% lower in 2023 on average than a year earlier.
Business Spotlight
Despite the natural gas price declines, the company likely boosted its U.S. gas production by 10% in the quarter, and VisibleAlpha forecasts an additional 5% increase in 2024 as natural gas prices recover slightly. They’re forecast to average $2.41 in the U.S. in 2024, up 8% from the expected fourth-quarter average.
Shares of ConocoPhillips have traded flat over the past year.