Equinor surpasses anticipated earnings to some extent.
Facing a decrease in oil prices, Equinor, Norway's oil giant, experienced a dip in earnings, leading to a decline in revenues and profits. Despite this, the company managed to report a decent quarter in other aspects, failing to meet its renewable energy production goals, however.
During the summer, Equinor's earnings took a hit, but the impact was softened due to higher gas prices and enhanced production levels, resulting in profits exceeding projections.
The company's operating result, as per its preferred measurement, saw a year-on-year decrease from $7.9 billion to $6.9 billion, which slightly fell short of the expected $7.1 billion according to analysts' consensus. The net income fell slightly, from $2.5 billion to $2.3 billion, mirroring predictions made by analysts. Revenue witnessed a slight decrease of 2% to $25.4 billion, primarily due to a drop in oil prices.
Shareholders were rewarded with a quarterly dividend of $0.35, along with an additional $0.35 special dividend, just as in the previous quarter. Equinor also initiated the fourth phase of its share buyback program, worth $1.6 billion.
The company anticipates stable oil and gas production levels for the year. It now expects to invest around $12 billion to $13 billion, a decrease from the initial $13 billion figure. Equinor has revised its target for increasing electricity generation from renewable energy sources by 50% year-on-year, down from its initial goal of 70%. This change is attributable to slower progress on the Dogger Bank A wind farm.
Recently, Equinor acquired a 9.8% stake in Danish offshore wind giant Orsted, for approximately $2.5 billion, making it Orsted's second-largest shareholder after the Danish state. Equinor's long-term goal is to amass renewable energy capacity of between 12-16 gigawatts by 2030, up from less than one gigawatt as of the end of 2023. Orsted reported a loss of around $225 million in the second quarter, caused by delays and the abandonment of a project.
The decrease in oil prices negatively impacted not only Equinor but also other oil companies, leading to reduced earnings and profits. Despite Equinor's oil giant competitors facing similar challenges, Oil companies globally have been strategically diversifying their portfolios to include renewable energy sources in response to market shifts.
