The state-controlled company’s adjusted earnings before tax climbed to $12.4 billion in the third quarter, covering July to September, from $6.2 billion recorded in the corresponding period a year earlier.
The result also exceeded the $12.19 billion forecast by a poll of 21 analysts compiled by Equinor, marking the company’s strongest quarterly profit since the final three months of 2022.
“High production in the third quarter enabled us to capture additional value from higher prices,” Chief Executive Officer Anders Opedal said in a statement.
Buoyed by the performance, Equinor raised its full-year oil and gas production growth forecast to approximately four per cent, compared with its previous projection of three per cent.
The company produced 2.17 million barrels of oil equivalent per day (boed) during the third quarter, surpassing analysts’ expectations of 2.13 million boed. Production was also higher than the 2.13 million boed recorded in the same period last year.
The stronger output, combined with higher commodity prices, helped Equinor benefit from market conditions that have increased the value of oil and gas supplies amid geopolitical tensions and disruptions to energy flows.
Shares outperform European energy stocks
Investors have responded positively to Equinor’s performance, with its shares rising 86 per cent year-to-date and reaching record highs in recent weeks.
The stock has outperformed the broader European energy sector, which has gained approximately 43 per cent over the same period.
The performance reflects Equinor’s position as a major supplier of oil and gas to Europe and its lack of direct exposure to the Middle East, where the ongoing conflict has disrupted energy markets and contributed to price volatility.
As a major producer outside the conflict zone, the company has benefited from elevated prices while maintaining production from its own operations.
However, the rally in energy prices also underscores the influence of geopolitical developments on oil and gas companies’ earnings, with commodity price movements capable of significantly affecting financial results.
Buybacks increase as dividend remains unchanged
Equinor’s strong earnings have also supported its shareholder distribution plans.
In June, the company announced that it would double its share buybacks, targeting approximately $3 billion in total returns to shareholders through the programme this year as higher oil and gas prices strengthened its cash generation.
Despite the stronger quarterly performance, Equinor maintained its regular quarterly dividend at $0.39 per share.
Unlike some industry peers, the company did not announce an additional or extraordinary dividend payment alongside its latest results.
The decision maintains the existing dividend level while allowing the company to continue returning capital through its expanded share repurchase programme.
Downstream business exceeds expectations
Equinor’s downstream division, which includes its energy trading activities, also delivered a stronger-than-expected performance during the quarter.
The unit reported a profit of $893 million, comfortably above analysts’ expectations of $793 million and more than double the division’s quarterly profit guidance of $400 million.
The performance provided an additional boost to the company’s results, demonstrating that earnings growth extended beyond the benefits of higher oil and gas prices and production.
With third-quarter production exceeding market expectations and the full-year output growth forecast revised upwards, Equinor enters the remainder of the year with stronger earnings momentum.
Nevertheless, the sustainability of its performance will depend partly on commodity price movements, production levels and developments in the global energy market as geopolitical uncertainty continues to shape supply and demand.
For now, the latest results underline the financial benefits Equinor has derived from higher energy prices and stronger production, while its expanded share buyback programme signals its intention to return a significant portion of the resulting cash generation to shareholders.