Key Takeaways
- TotalEnergies (TTE) shares advanced approximately 3% during premarket hours following an upbeat Q1 profit forecast
- Elevated hydrocarbon prices projected to contribute $2–$2.5 billion in working capital gains for the quarter
- Middle East tensions have reduced production by roughly 100,000 barrels per day, representing about 15% of overall output
- Liquefied natural gas performance anticipated to significantly exceed Q4 levels, supported by 10% volume growth and robust trading activity
- European refining margins reached $11.40 per ton, marking a 192% year-over-year increase; complete quarterly results scheduled for April 29
TotalEnergies (TTE) announced Thursday that it anticipates a substantial improvement in first-quarter profits, fueled by elevated energy commodity prices and vigorous liquefied natural gas trading operations, despite production setbacks stemming from the escalating Middle East crisis.
Shares of the French energy giant’s American depositary receipts jumped approximately 3% in early premarket activity after the announcement.
According to the company’s guidance, first-quarter production levels are anticipated to remain relatively stable at approximately 2.55 million barrels of oil equivalent daily compared to the fourth quarter.
The escalating conflict involving Iran has compelled TotalEnergies to reduce or suspend operations across Qatar, Iraq, and offshore United Arab Emirates facilities. Additionally, a refining facility in Saudi Arabia was recently shuttered following damage from the conflict. Collectively, these disruptions are removing approximately 100,000 barrels daily from the company’s output — equivalent to roughly 15% of total production capacity.
New production ventures coming online in Libya and Brazil are partially compensating for these losses.
Price Strength and Trading Activity Drive Profitability
Despite the production shortfall, TotalEnergies indicated that strengthening hydrocarbon prices are projected to deliver between $2 billion and $2.5 billion in working capital benefits during the three-month period.
Liquefied natural gas segment results are positioned to substantially outperform fourth-quarter figures. Management credited 10% volume expansion and vigorous trading operations, with heightened market volatility creating favorable conditions.
European refining margins throughout the first quarter averaged $11.40 per ton — representing a 192% surge from $3.90 recorded in the year-ago period, and surpassing analyst projections. Refinery capacity utilization exceeded 90%.
The Integrated Power division is expected to generate approximately $500 million in results, holding steady compared to the prior year. The Marketing and Services segment is similarly tracking in line with last year’s first quarter performance.
Wall Street Perspective
Jefferies analyst Mark Wilson characterized the trading update as a “small positive,” highlighting that TotalEnergies seems to be managing working capital challenges more effectively than certain competitors, including Shell and BP.
Wilson suggested the possibility of an approximately 10% upside to the Q1 consensus net income estimate of €4.8 billion. He identified the LNG trading segment as the primary catalyst for potential outperformance.
TotalEnergies is set to release comprehensive first-quarter financial results on April 29.
