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Encana in 1Q15: Huge Impairment Charge Leads to Net Loss Net loss in 1Q15
Encana (ECA) released its earnings results for 1Q15 on May 12. This is an account of its quarterly income and revenues.
Encana’s (ECA) net profits were lower in 1Q15 compared to profits in 1Q14. In 1Q15, it recorded a $1.7 billion net loss as opposed to $116 million in net income a year earlier. The company’s net income margin also slumped to -136.7%, down from 6.1% for the same period last year.
The primary reason Encana witnessed such a huge drop in net profit was a $1.22 billion impairment charge it recorded in 1Q15. Lower crude oil and natural gas price realization also contributed to the decline in profit. The fall in income was partially offset by greater liquid production volumes and a reduction in transportation and processing costs. Read Part 4 of this series to discover how Encana still managed to remain profitable at an operating profit level.
Revenues decreased
In 1Q15, Encana’s (ECA) net operating revenues dropped 34% to $1.25 billion, down from $1.89 billion recorded in 1Q14. Canadian and US operations respectively recorded a 47% and 17.5% fall in revenues in 1Q15 over the same quarter a year ago.
The company’s market optimization operation also recorded a 43% revenue drop during the same period. Encana’s market optimization function refers to the sale of upstream production to third-party customers.
In comparison, WPX Energy(WPX) revenues decreased 35% in 1Q15 over 1Q14, and Linn Energy (LINE) revenues decreased 50% during the same period. Ultra Petroleum (UPL) recorded a 22% decline in revenues in 1Q15 over the same quarter the previous year.
Ultra Petroleum makes up 1.3% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
Company background
Encana (ECA) is an independent oil and gas exploration and production company. The company produces oil and gas in resource plays located in the US and Canada:
- Montney
- Duvernay
- DJ Basin
- San Juan
- Tuscaloosa Marine
- Eagle Ford
- Permian Basin
In the next part of this series, we’ll analyze Encana’s historical performance compared to analyst estimates.
Continue to Prior Part Browse this series on Market Realist:
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Encana Corporation
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EXPLORATION STAGE |
CODE : ECA.TO |
ISIN : CA2925051047 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Encana is a oil and natural gas producing company based in Canada. Encana holds various exploration projects in Canada. Its main exploration property is BUFFALO HILLS in Canada. Encana is listed in Canada and in Germany. Its market capitalisation is CA$ 4.8 billions as of today (US$ 3.7 billions, € 3.3 billions). Its stock quote reached its highest recent level on November 23, 2018 at CA$ 9.99, and its lowest recent point on January 24, 2020 at CA$ 4.96. Encana has 973 120 000 shares outstanding. |