Hess Corp. (HES) Beats Estimates, Profit Rises

Hess Corp. (NYSE:HES) reported second quarter net income attributable to the company at $1.431 billion or $4.16 per share versus $549 million or $1.61 per share for the same period last year. For the second quarter, adjusted earnings came in at $520 million and $1.51 per share versus $585 million in the same quarter last year. Analysts polled by Thomson Reuters expected earnings of $1.41 per share.

Hess Corp

Total revenue and non-operating income amounted to $4.105 billion an increase from $3.321 billion from the prior year quarter. Revenues missed the estimate of $4.62 billion for the quarter.

Performance of E&P segment

Earnings from Exploration and Production (E&P) came in at $1.533 billion against $644 million in the year ago quarter. The huge difference in the earnings mainly stems from the fact that it included $933 million of income this quarter while the second quarter of 2012 included an after-tax charge of $36 million.

Oil and Gas production during the quarter came in at 341,000 barrels of oil per day, which is a decline from 429,000 barrels in the year ago quarter. The fall in the production was mainly due to the asset sale in Russia, the United Kingdom North Sea etc. For the full year, Hess Corp. (NYSE:HES) expects production of 340,000 to 355,000 barrels of oil equivalent per day.

Sale of assets

Hess Corp. (NYSE:HES) concluded the sale of its Russian subsidiary and interest in the Beryl area fields in the United Kingdom North Sea, the Azeri-Chirag-Guneshli fields offshore Azerbaijan and the Eagle Ford assets in Exas, in 2013. From the sale, the company earned proceeds of $3.5 billion. Earlier this week, Hess announced the sale of its Energy marketing business to Direct Energy for $1.025 billion. Also, sale of other upstream assets in Indonesia and Thailand, and downstream terminals etc are also in the pipeline.

Hess Corp plans dividend increase and share repurchase

As was expected, Hess Corp. (NYSE:HES) is planning to increase the dividend by 150 percent amounting to an annual dividend of $1 per common share. It also plans a share repurchase plan of up to $4 billion. The earlier announcement from the company to sell its Energy marketing business for $1.025 billion will help it to carry forward with its share repurchase plan. Also, monetization of the Bakken infrastructure assets by 2015 will further enhance the cash returned to the shareholders.