Total Q1 Profit Beats Estimates

Total Q1 Profit Beats EstimatesTotal Q1 Profit Beats Estimates

Total SA posted first-quarter profit that beat analysts’ estimates, as cost cuts, rising production and resilient refining earnings helped the French company offset the slump in crude prices.

Adjusted net income fell 37% from a year earlier to $1.64 billion, the company based in Courbevoie near Paris said in a statement on Wednesday. Analysts had expected a profit of $1.25 billion, according to the average of 10 estimates compiled by Bloomberg.

The company’s refining and chemicals division improved its results “thanks to a record-high utilization rate of 94% and favorable petrochemicals margins”, Chief Executive Officer Patrick Pouyanne said in the statement. “The upstream portfolio benefited from the lowest technical costs among the majors.”

The French explorer joins BP and Norway’s Statoil in posting better-than-expected results after cutting costs and spending to counter the plunge in oil prices. Total has said the savings will allow it to fund shareholder payouts in 2017 from the cash it generates from pumping, refining and selling oil at a rate of about $60 a barrel, without the need to borrow.

“Results are strong across the board and the outlook statement broadly consistent with prior guidance,” Jefferies International Ltd. analysts Marc Kofler and Jason Gammel wrote in a note. “We still believe Total represents one of the best ways to play a recovery in commodity prices.”

Total maintained its plan to cut costs by $2.4 billion this year compared with 2014 and to deepen these savings to more than $3 billion by 2017. The French company also plans to raise $4 billion in 2016 through disposals, part of a plan to sell $10 billion of assets from 2015 to 2017.