TLDR
- TotalEnergies (TTE) shares advanced approximately 3% in premarket sessions following optimistic Q1 earnings guidance
- Rising oil and natural gas prices projected to contribute $2–$2.5 billion to working capital during the first quarter
- Middle East tensions reduced production by roughly 100,000 barrels per day, representing approximately 15% of total capacity
- Liquefied natural gas performance anticipated to significantly exceed Q4 levels, fueled by 10% output expansion 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 increase in first-quarter profitability, propelled by elevated energy prices and vigorous LNG trading operations, despite Middle East conflict disruptions reducing a significant portion of its production capacity.
Shares of the French energy giant trading in U.S. markets surged approximately 3% during premarket hours after the announcement.
The corporation indicated that first-quarter production volumes are projected to remain relatively stable at approximately 2.55 million barrels of oil equivalent per day when compared to the previous quarter.
The escalating Iran conflict has compelled TotalEnergies to reduce or suspend operations across Qatar, Iraq, and offshore United Arab Emirates facilities. A refining facility in Saudi Arabia was also recently shuttered following damage sustained in the conflict. Collectively, these disruptions are removing approximately 100,000 barrels daily from production capacity — representing roughly 15% of the company’s total output.
New operational launches in Libya and Brazil are partially offsetting these production losses.
Price Increases and Trading Activity Drive Profitability
Despite the production setbacks, TotalEnergies indicated that elevated hydrocarbon prices are projected to contribute between $2 billion and $2.5 billion to working capital throughout the quarter.
Liquefied natural gas performance is anticipated to substantially surpass fourth-quarter levels. The company highlighted 10% production expansion and vigorous trading operations, with market volatility creating favorable conditions.
European refining margins throughout the first quarter averaged $11.40 per ton — representing a 192% increase from $3.90 during the same period last year, and exceeding analyst projections. Refinery capacity utilization exceeded 90%.
Integrated Power segment results are forecast at approximately $500 million, remaining relatively unchanged year-over-year. The Marketing and Services division is similarly performing in line with the corresponding period from the previous year.
What Analysts Are Saying
Jefferies analyst Mark Wilson characterized the announcement as a “small positive,” noting that TotalEnergies seems to be managing working capital challenges more effectively than several industry competitors, including Shell and BP.
Wilson suggested the possibility of approximately 10% outperformance versus Q1 consensus net income expectations of €4.8 billion. He identified LNG trading operations as the primary catalyst for upside potential.
TotalEnergies has scheduled the release of comprehensive first-quarter financial results for April 29.
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