{"id":42983,"date":"2023-08-01T08:01:53","date_gmt":"2023-08-01T12:01:53","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/equinor-asa-a-weak-quarter-as-gas-prices-are-falling-nyseeqnr\/"},"modified":"2023-08-01T08:01:56","modified_gmt":"2023-08-01T12:01:56","slug":"equinor-asa-a-weak-quarter-as-gas-prices-are-falling-nyseeqnr","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=42983","title":{"rendered":"Equinor ASA: A Weak Quarter As Gas Prices Are Falling (NYSE:EQNR)"},"content":{"rendered":"
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Introduction<\/h2>\n

The Norwegian-based Equinor ASA (NYSE:EQNR<\/span>) reported its second quarter 2023 results on July 26, 2023.<\/p>\n

Note: This article updates my article published on June 10, 2023. I have followed EQNR on Seeking Alpha since January 2017.<\/p>\n

This article discusses the company’s recent history, including the second-quarter earnings.<\/span><\/p>\n

As I said in my prior article, Equinor had an outstanding year in 2022 but now faces lower commodities prices retreating significantly from their highs, especially natural gas prices and NGL, representing a significant segment of Equinor’s revenue. The trend accelerated this quarter with a loss in free cash flow.<\/p>\n

CFO Torgrim Reitan said in the conference call:<\/p>\n

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We are delivering solid earnings this quarter with adjusted earnings totaling $7.5 billion and $2.2 billion after tax. The main explanation for the drop in the results is of course, the energy prices are significantly down from the extraordinary levels we saw last year. But compared to prior years, these are still solid results. Particularly, European gas prices are lower. And after a record warm winter, current storage levels in Europe are more than 80% full.<\/span><\/p>\n<\/blockquote>\n

1 – 2Q23 Results Snapshot and Commentary<\/strong><\/h4>\n

Equinor reported disappointing second-quarter results. Equinor generated a loss of $985 million<\/strong> in generic free cash flow this quarter, and revenues were $22.872 billion<\/strong>, down from $36.46 Billion in 2Q22 revenues.<\/p>\n

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EQNR 2Q23 Highlights (EQNR Presentation)<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

The integrated company is primarily an oil and gas producer with robust crude oil and natural gas segments, even if the natural gas segment dropped significantly this quarter, as we can see below:<\/p>\n

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\"Chart\"<\/span>
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EQNR Quarterly Revenue per Segment 1Q23 versus 2Q23 (Fun Trading)<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

The oil and natural gas prices are now significantly below what they were a year ago. However, oil prices have been trending up since July.<\/p>\n

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\"Chart\"<\/span>
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EQNR 1-Year Chart oil versus NG (Fun Trading StockCharts)<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

2 – Stock Performance<\/strong><\/h4>\n

Equinor’s stock has underperformed its peers, with a 20%<\/strong> loss on a one-year basis. It is one of the worst performers amongst its peers due to its exposure to the natural gas sector, which has helped the company in 2022 but is now a negative component.<\/p>\n

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\"Chart\"
Data by YCharts<\/figcaption><\/figure>\n<\/p>\n

Balance Sheet And Production History Ending in 2Q23: The Raw Numbers<\/h2>\n

<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Equinor<\/strong><\/td>\n2Q22<\/strong><\/td>\n3Q22<\/strong><\/td>\n4Q22<\/strong><\/td>\n1Q23<\/strong><\/td>\n2Q23<\/strong><\/td>\n<\/tr>\n
Revenues in $ billion<\/td>\n36.39<\/td>\n42.73<\/td>\n33.84<\/td>\n29.92<\/td>\n23.13<\/td>\n<\/tr>\n
Total Revenues and others in $ billion<\/td>\n36.46<\/td>\n43.63<\/td>\n34.32<\/td>\n29.22<\/td>\n22.87<\/td>\n<\/tr>\n
Net Income in $ million<\/td>\n6,757<\/td>\n9,384<\/td>\n7,897<\/td>\n4,966<\/td>\n1,829<\/td>\n<\/tr>\n
EBITDA $ billion<\/td>\n22.22<\/td>\n28.54<\/td>\n15.65<\/td>\n16.16<\/td>\n9.92<\/td>\n<\/tr>\n
EPS diluted in $\/share<\/td>\n2.11<\/td>\n2.97<\/td>\n2.51<\/td>\n1.59<\/td>\n0.60<\/td>\n<\/tr>\n
Cash from operating activities in $ billion<\/td>\n8.52<\/td>\n6.58<\/td>\n4.27<\/td>\n14.87<\/td>\n1.86<\/td>\n<\/tr>\n
Capital Expenditure in $ billion<\/td>\n1.71<\/td>\n2.05<\/td>\n2.66<\/td>\n2.05<\/td>\n2.84<\/td>\n<\/tr>\n
Free Cash Flow in $ billion<\/td>\n6.81<\/td>\n4.53<\/td>\n1.60<\/td>\n12.82*<\/td>\n-0.99*<\/td>\n<\/tr>\n
Total cash $ billion<\/td>\n45.69<\/td>\n44.34<\/td>\n39.31<\/td>\n50.04*<\/td>\n40.56*<\/td>\n<\/tr>\n
Long-term debt (+liabilities) in $ billion<\/td>\n29.84<\/td>\n28.55<\/td>\n28.50<\/td>\n27.40<\/td>\n27.12<\/td>\n<\/tr>\n
Dividend per share in $ per share<\/td>\n0.20 (+0.50)<\/td>\n0.20 (+0.70)<\/td>\n0.30 (+0.60)<\/td>\n0.30 (+0.60)<\/td>\n0.30 (+0.60)<\/td>\n<\/tr>\n
Shares outstanding (diluted) in billion<\/td>\n3.197<\/td>\n3.157<\/td>\n3.144<\/td>\n3.124<\/td>\n3.049<\/td>\n<\/tr>\n
Oil Production<\/strong><\/td>\n2Q22<\/strong><\/td>\n3Q22<\/strong><\/td>\n4Q22<\/strong><\/td>\n1Q23<\/strong><\/td>\n2Q23<\/strong><\/td>\n<\/tr>\n
Oil Equivalent Production in K Boepd<\/td>\n1,984<\/td>\n2,021<\/td>\n2,046<\/td>\n2,130<\/td>\n1,994<\/td>\n<\/tr>\n
Group average liquid price ($\/b)<\/td>\n106.9<\/td>\n92.9<\/td>\n80.4<\/td>\n73.8<\/td>\n70.3<\/td>\n<\/tr>\n<\/table>\n

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