Encana Q1 Operational Earnings Top View

(RTTNews) - Canadian energy producer Encana Corp. (ECA.TO, ECA) reported Tuesday a profit in its first quarter, compared to a loss last year, benefited by lower one-time charges. Operating earnings beat analysts' estimates with a surge in revenues mainly on strong Canadian operations.

Encana said it earned $116 million or $0.16 per share in the first quarter 2014, as against a loss of $431 million or $0.59 per share in the prior year.

The latest results included unrealized hedging loss of $203 million and non-operating foreign exchange loss of $194 million. The prior year's results included hedging loss of $266 million, foreign exchange loss of $101 million, as well as negative income tax adjustments of $243 million.

Operating earnings for the quarter surged to $515 million or $0.70 per share from $179 million or $0.24 per share last year. On average, 9 analysts polled by Thomson Reuters expected earnings per share of $0.54 for the quarter. Analysts' estimates typically exclude one-time items.

During the quarter, Encana generated cash flow of approximately $1.09 billion or $1.48 per share, an 88 percent increase from the prior year.

Revenues for the first quarter, net of royalties, climbed to $1.89 billion from last year's $1.06 billion, while analysts were looking for revenues of $1.90 billion.

The company generated revenues of $1.19 billion from its Canadian operations, significantly higher than last year's $643 million. Revenues from the USA operations improved to $713 million from $662 million a year ago.

In the quarter, production of natural gas dropped 2 percent to 2,809 Mmcf/d from last year's 2,877 Mmcf/d. However, production of liquids climbed 56 percent from last year to 67.9 Mbbls/d.

NYMEX natural gas prices increased to $4.94 per MMBtu from $3.34 MMBtu a year ago. Encana realized gas price climbed to $5.82 per thousand cubic feet from $3.86 per thousand cubic feet.

Further, Encana said its board on Monday declared a dividend of $0.07 per share to shareholders on record June 13, payable June 30.

Also, on Monday, Encana said its unit Encana Oil & Gas (USA) Inc., has completed the previously announced sale of certain natural gas properties in the Jonah field in Wyoming to an affiliate of TPG Capital, for about $1.8 billion.

Looking ahead for fiscal 2014, the company expects total cash flow between $2.9 billion and $3 billion, or between $3.90 and $4.05 per share.

Total capital investment for the year is projected to be in the range of $2.4 billion to $2.5 billion.

Total annual production is expected to be 2,850 Mmcfe/d to 3,100 Mmcfe/d, with natural gas production in the range of 2,450 Mmcf/d to 2,650 Mmcf/d.

In Canada, Encana shares gained C$0.14 or 0.57 percent on Monday, and settled at C$24.60.