ConocoPhillips profit plunges in First Quarter FY15

ConocoPhillips profit plunges

ConocoPhillips announced its first quarter 2015 earnings report on Thursday April 30. Average realized price dropped to $36.96 a barrel from $71.21 a barrel a year ago. Company’s earnings fell less than expected in the first quarter.

ConocoPhillips released its first quarter earnings for fiscal year 2015 on Thursday April 30. The company said that its earnings declined less than expectations in the quarter ended on March 31, even the crude oil prices declined by over 50 % in the last nine months.

ConocoPhillips was amongst the first big oil companies to cut its FY15 capital expenditures to deal with the declining crude oil prices. Earlier last month, the company said it will limit capital spending will 2017 to imitate estimations that commodities prices will be stable.

The company said it will reduce its cost on new sources exploring of oil & gas, and also on shale formation drilling in North America and Niobrara in Colorado. For the first quarter of fiscal year 2015, the company’s average price declined from $71.21 per barrel last year to $36.96. In the meantime, its level of production flanked up slightly and reaches 1.61 billion barrels of oil equivalent per day.

On the whole, ConocoPhillips posted $272 million in net income equals to $0.22 per share as compared to $2.12 billion or $1.71 per share in the prior year quarter.

Exclusive of deferred tax, the oil producer reported $0.18 loss per share compared to $1.181 per share of profit last year in similar quarter, while analysts estimated a loss of $0.19 per share. Operating costs declined from $2.3 billion in 4QFY15 to $2.1 billion in most recent quarter.

The reason for the weakness was due to collapse in crude oil prices over past 9 months, obvious from the fact that company’s realized price in first quarter was only $36.96 per barrel of oil equivalent, much less than $71.21 in the prior year quarter.

The company was able to somewhat balance the weaker commodity prices by low costs. Its operating costs decreased to $2.1 billion from $2.3 billion in first quarter of fiscal year 2014 after adjustment for cost of restructuring, company’s operating cost essentially enhanced by 12% compared to last year quarter.
If the commodity prices had not collapsed the company’s result for first quarter would have extra ordinary.

ConocoPhillips accomplished its target for growth, slash its costs and moved forward on its projects and all programs which are most likely to generate future returns.

ConocoPhillips stock was up by 0.7% during pre-market session as it retain its guidance for dull year 2015.

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