By Christian Moess Laursen

Italian energy major Eni lowered its guidance for the year due to a decline in oil prices that also hit net profit in the third quarter.

The integrated oil-and-gas company said Friday that it lowered its target for adjusted operating profit for the year by around 1 billion euros ($1.08 billion) to 14 billion euros. It also cut guidance for cash flow from operations before working capital by 500 million euros to 13.5 billion euros.

Eni had considered an average oil price of $86 a barrel for its previous outlook, but now expects $83 a barrel.

Oil prices ended the quarter to Sept. 30 at $71.70, tumbling from above $87 a barrel earlier in the period.

The weaker oil price also hit third-quarter net profit, which slumped 73% on year to 522 million euros. Earlier this week, Eni's Norwegian peer Equinor missed forecasts to its key profit measure, also citing lower oil prices.

However, Eni's adjusted net profit of 1.27 billion euros beat company-compiled consensus of 1.08 billion euros.

Adjusted earnings before interest and taxes--one of Eni's most closely watched metrics by analysts and investors--also exceeded expectations, with 3.40 billion euros against 3.15 billion euros.

Chief Executive Claudio Descalzi said Eni proved resilient due to its portfolio, cost and capital discipline and growth focus.

The beats were driven by better-than-expected performances in most segments, according to analysts. Key divisional drivers were its global gas and liquefied natural-gas portfolio as well as a surprisingly positive results in refining, RBC Capital Markets said in a note.

Despite the lowered guidance and weak oil prices, the Milan-based company raised its shareholder distribution policy to 38% of its cash flow from operations, allowing it to buy back additional shares for up to 400 million euros. This is the second time Eni raised its buyback plan this year, now planning for 2.0 billion euros of stock by April.

Eni's financial position improved over the last two quarters due to recent divestments, helping it to increase shareholder returns. Earlier this week, it agreed to sell a 25% stake in its biorefining unit Enilive for 2.94 billion euros to New York private-equity firm KKR & Co.

Meanwhile, Eni's hydrocarbon production rose 2% on year to 1.66 million barrels of oil-equivalent a day. Eni said it expects full-year production to be around 1.70 million barrels.

Shares were up 0.6% at 14.31 euros in morning trading in Europe, but down 6.7% year to date.

Write to Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

October 25, 2024 04:17 ET (08:17 GMT)

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