Oil stocks Shell and ConocoPhillips fell Thursday even though both companies reported above-forecast Q1 results. BP traded lower after reporting on Wednesday a massive profit for the first quarter amid an even larger write down on assets in Russia.
Meanwhile, the Organization of Petroleum Exporting Countries on Thursday said it was not boosting output past an already planned modest increase to 432,000 barrels per day for next month. Crude oil prices popped above $110 a barrel intraday Thursday before settling for a 0.4% gain to $108.26. Crude is still up sharply for the week.
Before Thursday's overall market reversal, oil stock earnings received a sharp boost from the confluence of events that has pinned oil prices above $100 a barrel. While demand from China slows due to a prolonged lockdown in Shanghai, the EU is curbing Russian crude imports and mulling whether to completely ban Russian oil by year-end. And oil-producing members of OPEC+, which includes Russia, don't appear eager to fill the gap.
That's meant big profits for Western oil companies that have reported quarterly results so far this earnings season. Chevron and Exxon Mobil posted mixed results last week, while Devon Energy and Diamondback Energy topped views on Monday.
However, for the most part, they've opted to hike dividends and proceed with share buybacks while remaining cautious on spending in an inflation-fueled environment to increase oil production.
Oil Stocks: Shell Earnings
Estimates: FactSet analysts expected Shell to more than double earnings from the year-ago period to $2.20 a share. Sales were set to pop 46% to $81.456 billion.
Results: Adjusted earnings rose to $9.1 billion for the quarter, nearly three times the year-ago profit of $3.2 billion. FactSet recorded the gain at $2.40 per share, up from 84 cents a year ago.
Quarterly revenue came in at $84.2 billion, up from $55.67 billion in Q1 2021.
Shell had warned that its exit from Russia could cost it $4 billion to $5 billion in write-offs. But the company reported a $3.9 billion write down for the quarter related to Russia-based losses. Shell's largest holding in Russia was its 27.5% stake in the Sakhalin-2 liquefied natural gas project with Gazprom.
Stock: Shell stock fell 3 cents to 56.94 on Thursday. Shares gained 2.4% on Wednesday. SHEL stock peaked at 56.13 on Feb. 7, then sold off in late February as Russia's invasion began. Shares rebounded to a new high of 58.68 in early April before pulling back again.
Its RS line is ticking back upward, while its RS Rating sits at 94. Shell's EPS Rating is 79.
ConocoPhillips Stock
Estimates: ConocoPhillips earnings were seen coming in at $3.17 vs. 69 cents a year ago, on sales of $17.321 billion, a 64% surge from the prior year's quarter.
Results: Conoco reported adjusted earnings of $3.27 a share on revenue of $19.29 billion, both above views.
Stock: Shares lost 1% to 102.86 on Thursday, after jumping 5% Wednesday. COP stock is back above its 50-day line. A number of top oil stocks are now building bases. Conoco stock could have a proper base with a 107.62 buy point after this week.
Its relative strength line is also moving up again, holding around 3-year highs. ConocoPhillips shares have an RS Rating of 97 and an EPS Rating of 74.
BP Earnings
Estimates: Wall Street expected BP earnings per share to double to $18.64, while sales were seen jumping 70% to $44.669 billion.
Results: BP posted earnings of $25.56 a share. But BP also reported a $25.5 billion write-down related to assets in Russia, from which it was backing away due to international sanctions tied to Russia's attack on Ukraine. Those assets primarily involve a nearly 20% stake in state-run oil producer Rosneft.
The company increased its share buyback initiative by $2.5 billion, following $1.6 billion in share repurchases during the first quarter. On the capital expenditures line, BP said it spent $2.9 billion during the first quarter, and held tight to prior spending projections for the year of $14 billion to $15 billion.
Minus the one-time Russia-related charge, BP reported that its replacement cost — a net income figure that includes the value of stored oil as an asset — soared to $6.2 billion. That was far above consensus expectations of $4.5 billion, as well as year-ago replacement cost of $2.63 billion.
Stock: BP stock fell 2% to 31.22 on Thursday. Shares rose 2.2% on Wednesday, after jumping 8% in stock market trading Tuesday. Like a number of other oil stocks, BP gapped up above its 50-day moving average after earnings. Shares are in a consolidation with a 34.26 buy point, according to MarketSmith. Shares peaked at 34.16 on Feb. 11, then sold off in late February as Russia's invasion began, and BP stock announced its intention to exit Rosneft.
Its relative strength line is ticking up again after sliding in mid February. BP's RS Rating hit a new high of 90 out of a best-possible 99, while its EPS Rating is 74.
Also on Thursday, Canadian Natural Resources beat earnings expectations with adjusted EPS of $2.86 and revenue of $8.3 billion. CNQ stock fell 2.8%. Oasis Petroleum posted EPS of $8.32, a 265% surge from the year-ago period, while revenue roughly doubled from the year-ago quarter to $653 million. OAS stock rose 0.9%.
On Wednesday, Oneok reported EPS of 87 cents on sales of $5.445 billion, and Cheniere Energy posted a loss of $3.41 per share on revenue of $7.484 billion. OKE stock dropped 4.9% on Thursday, while LNG declined 2.4%.
Callon Petroleum reported after the close on Wednesday that EPS surged 130% to $3.43 on a 116% jump in sales to$777.2 million. CPE stock sank 7.7% Thursday.
Laredo Petroleum posted adjusted quarterly earnings of $5.17 per share, missing views. But revenue came in above expectations at $532.4 million. LPI stock cratered 12%.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
