* Fourth-quarter earnings $1.08 billion, $1.43 a share * Cash flow down 32 percent at $1.3 billion, $1.73/shr * Shares down 2.3 percent at C$51.90 (Recasts, adds comments and details. In U.S. dollars unless noted)
By Scott Haggett
CALGARY, Alberta, Feb 12 (Reuters) - EnCana Corp (ECA.TO), Canada’s biggest energy company, said on Thursday it plans no bold moves this year as it looks to cope with tumbling prices.
The company reported on Thursday that its fourth-quarter operating profit fell by nearly half while net income, buoyed by unrealized gains on gas-price hedges, was nearly unchanged from the same period of 2007 at $1.08 billion.
EnCana is among North America’s biggest natural gas producers, with output in the fourth-quarter of nearly 3.9 billion cubic feet a day. But benchmark prices for the fuel have plunged by almost half over the past year as the recession eats into demand and the company says it will steer clear of expensive plans until conditions improve.
“It’s not clear how long the current economic and market conditions will persist,” Randy Eresman, EnCana’s chief executive, said on a conference call. “Until we’re comfortable with our financial expectations in 2010 we will not be making any bold moves.”
EnCana has already had to retrench because of the economic crisis. Last October it shelved plans to split into natural gas and oil sands arms until conditions improve.
The company expects prices to remain weak through the remainder of the first quarter of 2009.
EnCana’s net income was nearly unchanged from the fourth quarter of 2007, at $1.08 billion, or $1.43 a share.
The results included $747 million in non-cash gains from hedging activities. Excluding that and other one-time items, EnCana reported an operating profit of $449 million, or 60 cents a share, down from $849 million, or $1.12 a share, in the year-ago period.
The operating result lagged the average profit forecast of 77 cents a share from analysts estimates compiled by Reuters Estimates.
EnCana’s cash flow, a key measure of its ability to fund new projects and drilling, fell 32 percent to $1.3 billion, or $1.73 a share.
Dragan Trajkov, an analyst with Salman Partners, said the company’s oil sands production and refining joint-venture with ConocoPhillips (COP.N) posted weak results as plunging oil prices in the quarter ate into profits.
“Operationally it was a good quarter,” he said. “However the refining cash flow went below my expectations.”
EnCana’s fourth-quarter natural gas production increased 4 percent to 3.9 billion cubic feet a day while oil and natural gas liquids output was flat from the year-prior quarter at 136,000 barrels per day.
Revenue rose more than 8 percent to $6.36 billion.
EnCana shares were down C$1.22, or 2.3 percent, at C$51.90 on the Toronto Stock Exchange late on Thursday afternoon. The shares have dropped 24 percent over the past 12 months.
$1=$1.25 Canadian Additional reporting by Krishna Chaithanya; editing by Rob Wilson