Is Conoco Phillips (NYSE:COP) on the Rise?

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By Hanson So on October 31, 2014 Economy

Conoco Phillips (NYSE: COP) is a well-known name in the American multinational energy corporation sector. It is considered as the world’s largest exploration and Production Company, and is also ranked among the Fortune 500. Conoco Phillips (NYSE: COP)’s result for its third quarter came in on Thursday. The oil and gas company report its earnings per share at $1.29 with revenue wrap up of $12.92 billion. This came as a shock to the company, as the results dropped this year in comparison to last. Last year the EPS was $1.47 and revenues were $15.47 billion in the third quarter. The Thomas Reuters figures for the third quarter were $1.20 with $13.63 billion in revenue.

With the sale of its Nigerian assets, the profits were stated at $2.7 billion with $217 per share earnings.

Conoco (NYSE: COP) also offers the best dividend yield among the US oil companies. Its dividend went up from $0.69 to $0.73 this quarter, making the dividend yield a solid 4.20%.

The company’s guidance for 2014 is expected at 3% to 5% increase in margin and volume. Its production from operations is expected at 1.525 million to 1.535 million barrels of oil per day. This is without the Libyan production figures. With high expectation of the fourth quarter, the company plans to wrap up the year with 1.545 million to 1.575 million barrels of oil per day. The consensus at this stage puts the fourth quarter at $1.24 EPS with $14.94 billion in revenue. For the year, the speculations are $5.92 EPS, and revenues at $58.69 billion.

Analyzing this quarter, the company’s production was at 1.473 million barrels of oil in a day without including the Libyan production. Crude oil production declined to 565,000 as compared to 571,000 barrels a year ago. Natural gas production fell to 3.89 billion cubic feet, from 4.06 billion a year ago.

The price realization also kept declining with every quarter. Crude oil barrel was once $106.74, but by the second quarter it was $103.53, and by the end of third quarter it was only $96.67.

In terms of natural gas liquids, prices fell from $40.47 to $37.66 a barrel. Bitumen prices also fell from $70.06 to $62.49. However, natural gas price grew by $0.03. The explorations expenses with in the U.S rose from $165 million to $340 million, but fell internationally from $148 million to $119 million.

According to the company’s CEO, Conoco Phillips (NYSE: COP) has maintained its position according to the current environment, and will deliver 3 to 5 percent volume and margin growth with an additional attractive dividend. He believes what lies ahead, is good investment opportunities for Conoco Phillips (NYSE: COP), with high quality inventory and strong assets. He further emphasized that the company has more to deliver for 2015, with its North American sector and several project startups in the pipeline.

Conoco (NYSE: COP) shares closed at $70.75, with 52 week ranging from $62.74 to $87.09. The analysts’ consensus is at a target price of $88.20.