Analyst Note
| Allen Good, CFA |Riding the recovery in commodity prices, Total reported much-improved first-quarter results compared with the year before, with adjusted earnings rising to $3.0 billion from $1.8 billion. With the exception of downstream, each segment reported improvement. Exploration and production adjusted operating income increased to $2.0 billion from $703 million the year before due to higher commodity prices, while integrated gas and renewable power adjusted operating income increased to a record $985 million thanks to strong trading performance and the growing contribution of renewables and electricity, whose EBITDA increased 38% from the year prior to $344 million, offsetting lower liquefied natural gas prices. Refining and chemicals adjusted operating income fell to $243 million from $382 million a year ago on lower refining margins. Marketing and services adjusted operating income fell to $284 million from $302 million last year on lower volumes. Total hydrocarbon production fell 7% to 2,863 thousand barrels of oil equivalent per day from 3,086 mboed last year on OPEC curtailments, unplanned shutdowns, asset sales, and natural decline, which offset new project startups. Our fair value estimate and moat rating are unchanged.