Though French oil giant and Motley Fool Income Investor recommendation Total SA
Its revenue rose about 19% in the third quarter, coming in close to $47 billion. Once again, more oil and gas revenue translated into more profits as adjusted net income climbed 32%. Cash flow, though, lagged a bit, growing at a respectable rate of 17%, but clearly trailing both profit and revenue growth.
The upstream business was once again the clear leader in terms of growth and absolute profits. Total's segment earnings rose better than 50% as higher price realizations balanced out the impact of lower production. Speaking of production, the reported total was down 2% in the quarter. Results were actually a little better than that figure suggests, though; the company was hurt by production-sharing agreements. Take out the effect of those price-sensitive agreements, and Total would have actually posted a modest production increase.
Elsewhere, the story really isn't too much different than at other large energy companies like ExxonMobil
Though Total continues to pay a respectable dividend, it is investing heavily in new production projects. In addition to spending more than a billion dollars for a stake in Canada's oil sands, the company is launching projects in countries like Angola, Libya, and Congo. While it will be a demanding goal, if those endeavors work out, the company just might hit its long-term goal of increasing production by 3% to 4% through 2010. While this stock has already been an outperformer among its large brethren, I wouldn't be in any particular hurry to sell just yet.
For more Foolish Takes on the energy sector:
- TODCO's Ace Up the Sleeve
- Does Chevron Earn Its Stripes?
- Strong Prices, Strong Profits at Occidental
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).