Today, Wednesday, February 8, Equinor (EQNR) reported a record $74.9 billion adjusted operating profit for 2022. That more than doubled the previous record.
Fourth quarter adjusted earnings edged higher to $15.06 billion from $14.99 billion but easily topped the $14.41 billion expected by analysts.
Fourth quarter net profit surged to $7.9 billion from $3.37 billion in the year-earlier quarter. Analysts had been looking for $4.31 billion.
And I’d note this all happened as equity oil and natural gas production fell 5% in the fourth quarter. (Equinor expects 3% growth in oil and gas production for 2023.)
And while natural gas prices have tumbled. But I think natural gas prices are headed up in the near future because European customers who got through the winter by drawing down stockpiles will soon start to rebuild reserves.
Equinor is a member of my Volatility Portfolio. The shares are up 12.25% since I added them to that portfolio on January 21, 20022.
If you’re looking to add an energy stock to your portfolio ahead of a year that looks likely to be a good one for energy stocks, I’d suggest Equinor. I’ll be adding it to my Jubak Picks Portfolio tomorrow with a target price of $40 a share.
The company has been very aggressively expanding its energy portfolio by adding wind farms and liquified natural gas capacity. (Its natural gas supplies on the Norwegian continental shelf make the company the go-to provider for Europe.)
The company sees organic capital spending at $10 billion to $11 billion in 2023, with an annual average of about $13 billion for 2024-25 from ~$12B previously. Equinor said it is “well positioned to deliver strong returns through the energy transition, expecting above 15% return on average capital employed to 2030.”
The company’s move to restructure its dividend for this quarter suggests confidence in these projects. Equinor raised its regular quarterly dividend to $0.30 from $0.20 and lowered its extraordinary dividend to $0.60 from $0.70 in the third quarter.
Before today’s close Equinor shares were down 8% in 2023. Today the stock popped $7.04% on the earnings news to close at $31.34.