(Bloomberg) -- Eni SpA lowered profit guidance for the year, reflecting a worsening oil-price outlook, even as third-quarter earnings beat analyst estimates.
Europe’s energy companies are reporting results for a period marked by lower crude prices and narrower margins for refining and chemical products.
Eni reduced its forecast for full-year proforma adjusted earnings before interest and taxes to €14 billion ($15.2 billion) from previous guidance of about €15 billion. Quarterly adjusted net income edged above estimates at €1.27 billion.
Although energy companies around Europe and elsewhere braced for weaker profits in the quarter, there’s so far no sign they’ll curtail returns to investors. Eni confirmed plans to raise its 2024 share buyback to €2 billion.
“Lower guidance was widely expected, as management had $86 a barrel for Brent for 2024 — too high compared to year-to-date average and prevailing oil prices,” Mediobanca analyst Alessandro Pozzi said in a note.
Benchmark Brent crude is currently trading around $75 a barrel in London.
Financial Breakdown: Eni Cuts FY Pro Forma Adjusted Ebit Forecast
Earlier this week, Eni signed a deal with KKR & Co. to sell a minority stake in its biorefining unit, Enilive. It’s seeking funds to finance clean-energy projects, a move that includes asset disposals and spinoffs.
The company said Friday its €8 billion asset-sale plan to 2027 is “proceeding faster than expected,” with half of the disposals coming from the exploration and production business.
“In upstream, we continue our divestment program, and are also in the final stages of evaluating options to monetize recent material discoveries via our dual exploration model,” Chief Executive Officer Claudio Descalzi said.
Eni also plans to spend about €2 billion to overhaul its aging chemicals business in Italy as part of a shift toward lower-carbon options, the company said Thursday, confirming an earlier Bloomberg report.
The shares traded up 1.1% at 9:10 a.m. in Milan on Friday.
Eni “continues to deliver on its strategic objectives, and the nudge-up in distributions is likely to be welcomed by investors,” RBC Europe Ltd. analysts said in a note.
(Updates with analyst comments starting in fifth paragraph, shares in 11th)
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