How Did Total’s Stock React to 4Q16 Earnings?
Total’s stock performance
Total (TOT) announced its 4Q16 earnings on February 9, 2017. The stock opened at $50.70 that day, which was about 1.6% higher than the previous day’s close. It saw a high of $50.70 and a low of $50.40 on February 9. Eventually, it closed at $50.50, which was about 1.1% higher than its previous day’s close. It trended in line with its peers, crude oil, and the broader market. The rise in TOT stock is also probably because the company exceeded its 4Q16 earnings estimate.
On February 9, 2017, TOT’s peers YPF (YPF), Eni SpA (E), and Royal Dutch Shell (RDS.A) rose 1.0%, 1.9%, and 1.0%, respectively. Crude oil and natural gas prices rose 1.3% and 0.50%, respectively, and the broader market indicator, the SPDR S&P 500 ETF (SPY), rose 0.60%. SPY also has a ~7.0% exposure to energy sector stocks.
Interested in TOT? Don't miss the next report.
Receive e-mail alerts for new research on TOT
Total’s 2016 update
Total’s production growth was instrumental in its better 2016 performance. Its upstream production rose 4.5% in 2016. Production has had a steep rise of 14.3% in the past two years, including 2016.
Overall, Total (TOT) continues to focus on its strategy of investing in core assets, reducing costs, and exiting non-competitive assets. Its organic investment for 4Q16 was $4.7 billion compared to $6.4 billion in 4Q15. Its organic investment for 2016 was $17.5 billion compared to $23.0 billion in 2015.
As for savings, Total’s cost savings for 2016 were $2.8 billion higher than its initial target of $2.4 billion for the year. Production costs fell from $9.90 per boe (barrel of oil equivalent) in 2014 to $5.90 per boe in 2016.
In terms of asset sales, Total continues to focus on its divestment target of $10.0 billion for 2015–2017. It has already achieved about 80.0% of that target.