piola666/E+ via Getty Images
Equinor (NYSE:EQNR) -7.3% in Wednesday's trading despite reporting Q4 adjusted earnings that beat expectations, as the oil and gas producer said it will cut its overall cash returns to shareholders by $3B this year.
Equinor (EQNR) said it sees combined dividend payments and share buybacks in 2024 sliding to $14B, down from $17B last year, reflecting a normalization of gas prices during 2023.
The company raised its ordinary quarterly dividend payment to $0.35/share from $0.30 but said its extraordinary cash dividend would be cut to $0.35/share from $0.60.
Equinor (EQNR) said it plans to spend $6B on buybacks in 2024, the same as in 2023, but reduce to $4B-$6B in 2025.
By contrast, European rivals BP and Shell have unveiled plans to raise dividends or stock buybacks after reporting quarterly profits that beat forecasts.
Q4 adjusted earnings fell by nearly half to $8.68B from $17B in the year-earlier quarter, suffering from weaker energy prices, but beat the $8.46B analysts consensus compiled by the company.
Equinor (EQNR) also forecast production will be unchanged in 2024 before rising 5% by 2026, then declining somewhat towards 2030 to ~2M boe/day down from 2.2M in Q4 2023.
The company's updated strategic plan relies on the ability to hold volume declines in maturing Norway oil and gas at 2% per year from 2026, Citi analysts said.
"The importance of this core business means there is a lot of operational leverage to this 'managed decline' assumption," Citi said, which "gives little headroom for investors to underwrite a renewables buildout where economics look to remain challenged by competition and market conditions."