Hess Q4. Adj. Profit Misses Estimates On Lower Oil Prices

(RTTNews) - Energy company Hess Corp. (HES) on Wednesday reported a loss for the fourth quarter on lower revenues, as higher production was offset by lower oil and gas prices. Adjusted earnings per share missed analysts' expectations, while revenues beat their estimates.

For the fourth quarter, net loss attributable to the company was $8 million or $0.03 per share, compared to net income of $1.93 billion or $5.76 per share in the prior-year quarter. The prior-year quarter's results included after-tax gains on asset sales totaling $1.34 billion.

Excluding items, adjusted net income for the quarter was $53 million or $0.18 per share, compared to $319 million or $0.96 per share in the year-ago quarter. On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.20 per share for the quarter. Analysts estimates typically exclude special items.

Hess noted that declining hydrocarbon prices reduced adjusted net income for the quarter by about $340 million, after-tax and net of hedging gains.

Total revenues and non-operating income for the quarter declined 19 percent to $2.53 billion from $3.11 billion in the same quarter last year. Analysts had a consensus revenue estimate of $2.14 billion for the quarter.

Oil and gas production for the quarter was 362,000 barrels of oil equivalent per day or boepd, up 18 percent from 307,000 boepd in the year-ago quarter. Bakken oil and gas production in the quarter was 102,000 boepd, up about 50 percent from the same period last year.

Excluding production from assets sold and Libya, pro forma production in the quarter was 352,000 boepd, up 28 percent from 275,000 boepd in the year-ago quarter.

The company's average worldwide crude oil selling price, including the effect of hedging, was $74.97 per barrel, down 24 percent from the same quarter last year. Meanwhile, the average worldwide natural gas selling price decreased 25 percent from last year to $5.24 per mcf.

For fiscal 2014, net income attributable to Hess declined to $2.32 billion or $7.53 per share from $5.05 billion or $14.82 per share in the prior year. Adjusted net income was $1.31 billion or $4.25 per share, compared to $1.89 billion or $5.55 per share in the previous year.

Total revenues and non-operating income for the year decreased 18 percent to $11.44 billion from $14.03 billion last year.

Street expected the company to earn $4.28 per share for the year on revenues of $13.51 billion.

Looking ahead to 2015, Hess expects production, excluding Libya, to average between 350,000 boepd to 360,000 boepd, an increase of 10 percent to 13 percent from pro forma production of 318,000 boepd in 2014.

The company noted that the increased production in 2015 will be driven by a full year of production from the Tubular Bells Field in the Gulf of Mexico following first production in late 2014.

CEO John Hess said. "We are taking prudent steps in 2015 to reduce our spending and maintain our financial flexibility. Given our strong balance sheet and resilient portfolio, we are confident in our ability to manage the current pricing environment and remain very optimistic about the company's long term growth potential."

Hess' 2015 capital and exploratory expenditures budget is $4.7 billion, which represents a 16 percent decrease from 2014.

HES is currently trading at $68.97, down $2.64 or 3.69 percent on a volume of 854,467 shares.