Stockwatch – Canadian oil producer Talisman Energy Inc. (TSE:TLM, Mkt cap 6.72B, P/E – , Div/yield 0.08/4.71, EPS -0.37, Shares 1.04B) has announced quarterly profits that have exceeded predictions, which will come as some relief after a turbulent 12 months.
Talisman shares have nearly halved in the past year, with weak oil and gas prices weighing the company down, but its figures for the third quarter ended September 30 suggest it is beginning to get back on track.
Talisman, which is reorganizing operations and selling assets to boost its share price, has managed to cut its capital budget for the year to about US$3 billion from US$3.2 billion.
It boasted earnings of US$425 million, or 38 cents per share, in the quarter, which is a recovery from a loss of US$5 million, or 8 cents per share, a year earlier.
However, cash flow dropped 11.5% to US$507 million, or 49 cents per share, in the three-month period, and it is feared that cash flow could take a further hit in the fourth quarter.
The Calgary-based firm has found itself on the wrong end of a global slide in crude prices, which have slipped by roughly 25% since touching a high of US$115 in June, said to be a result of excess supply and weak demand.
Excluding the gain on commodity derivatives and other items, profit was 5 cents per share, above analysts’ average estimate of 2 cents per share, according to Thomson Reuters I/B/E/S.
Total revenue and other income came down by nearly 8.7% to US$1.14 billion, missing the average analyst estimate of US$1.4 billion.
In an attempt to further offset tumbling oil prices, Talisman is aiming to sell US$2 billion in assets by mid-2015 – a target which chief executive Hal Kvisle said is looking increasingly achievable.
Stockwatch – Talisman’s net income grew year over year last quarter from a loss of $0.98 per share to a gain of $0.41.
Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains.
Is Your Stock Broker Acting in Your Best Interest? Read more here>>
Exchange Traded Funds Expose Investors to Unexpected Risks. Read more here>>
Investment Management – Risk vs. Return. Read more here>>
We believe successful investors must challenge the market consensus by maintaining an independent point of view. Like to learn more? Please contact us here>>
The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.