Total in 4Q16: Upstream and Downstream Earnings Rise
Total’s 4Q16 segmental earnings: Upstream
Changing oil prices have once again altered the dynamics in Total’s (TOT) segments. The company’s net adjusted operating earnings from its upstream segment rose 51.0% to $1.1 billion in 4Q16 compared to 4Q15. The segment’s contribution to Total’s operating earnings has risen from 32.0% in 4Q15 to 42.0% in 4Q16.
Interested in TOT? Don't miss the next report.
Receive e-mail alerts for new research on TOT
The rise in upstream earnings was due to higher crude oil prices, increased hydrocarbon production, and reduced operating costs. Brent prices, which averaged $44 per barrel in 4Q15, rose to $49 per barrel in 4Q16.
TOT’s downstream earnings
Operating income for Total’s (TOT) refining and chemical segment rose 13.0% to $1.1 billion in 4Q16 compared to 4Q15. The segment contributed 43.0% to the company’s operating earnings in 4Q16, which was the same as 4Q15. The rise in Total’s downstream earnings in 4Q16 was due to higher refining utilization rates and a surge in refining margins YoY (year-over-year).
Total’s refinery throughput rose to 89.0% in 4Q16 compared to 88.0% in 4Q15. Its ERMI (European Refining Margin Indicator) rose 8.0% to $41 per metric ton in 4Q16 compared to 4Q15. However, its marketing and services net adjusted operating income fell 22.0% to $411.0 million in 4Q16 compared to 4Q15.
Total’s (TOT) overall net adjusted operating earnings rose from $2.4 billion in 4Q15 to $2.7 billion in 4Q16, led by a surge in upstream and downstream earnings.
If you’re looking for exposure to integrated energy stocks, you can consider the Vanguard Energy ETF (VDE). VDE has a ~39.0% exposure to integrated energy sector stocks.