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2Q17 Results: Encana Reported Highest Profit since 2014

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Encana’s 2Q17 adjusted net income

Encana (ECA) announced its 2Q17 earnings on July 21, 2017, before the market opened. Per Encana’s earnings press release, ECA reported better-than-expected profit of ~$180 million in 2Q17. Wall Street analysts were expecting a much smaller profit of ~$33 million. On a year-over-year basis, ECA’s profits rose ~102%. In 2Q16, ECA reported a profit of ~$89 million. Even on a sequential basis and excluding any one-time items, ECA’s profits rose ~73% when compared with a profit of ~$104 million in 1Q17.

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Encana’s 2Q17 reported net income

Encana’s 2Q17 adjusted net income excludes one-time benefits and charges totaling $151 million, the majority of which are related to non-cash gains on risk management derivatives and non-operating foreign exchange gains. Including these one-time items, ECA’s reported net income on a GAAP basis was higher at $331 million, or $0.34 per share, in 2Q17 from -$601 million, or -$0.71 per share, in 2Q16.

How Encana’s quarterly net income is trending in fiscal 2017

In 1Q17, ECA reported a profit of ~$104 million, ~243% better than the Wall Street analyst consensus for a profit of ~$30 million. On a year-over-year basis, ECA turned the year-ago loss into profit. Encana reported a loss of ~$130 million in 1Q16. On a sequential basis and excluding any one-time items, ECA reported ~22% higher net income in 1Q17 when compared with a net income of ~$85 million in 4Q16.

ECA’s peers ConocoPhillips (COP) and Southwestern Energy (SWN) reported adjusted net income of ~$178 million and ~$40 million, respectively, in 2Q17. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies.

In the next part, we will take a look at ECA’s revenues.

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