Italy's Eni SpA said profits collapsed in the first quarter of 2009 but continued a trend of oil producers and service companies suffering less than expected after a $100/barrel collapse in oil prices. Eni said net profit excluding one-off items and unrealised gains or losses related to changes in inventory values fell 42.2 percent in the quarter, compared with the same period in 2008, to 1.76 billion euros ($2.32 billion).
A Reuters poll of nine analysts had given an average forecast of 1.58 billion euros for the underlying result. The results and a positive outlook on debt levels would ease concerns about a possible cut in dividend payouts or a credit downgrade, analysts said.
Eni shares rose 5.1 percent to 15.75 euros by 0803 GMT, outperforming a 1.8 percent rise in the DJ Stoxx European oil and gas sector index. On Thursday, US oil majors ConocoPhillips and Occidental Petroleum Corp also beat analysts' forecasts despite each reporting an 80 percent drop in earnings.
Earlier this week, US drillers Noble Corp and Nabors Industries, Europe's largest oil services company Saipem and US rival Halliburton topped analysts' forecasts. The resilience of oil companies' profits echoes how, when oil prices surged to a record above $147/barrel last July, their record-breaking profits often surprised analysts.
Eni's outperformance of forecasts was largely driven by a lower-than-expected fall in profits in its gas and power division, said Jason Kenney, oil analyst at ING. The company sold some low margin Italian gas assets and bought the Belgian gas group Distrigas, which enjoys higher margins, Kenney said. "You've got to take your hat off to them. Their gas strategy appears to be paying out."
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