TotalEnergies SE reported strong first-quarter profits, leading the company to boost its share buybacks and dividend. The French energy giant plans to repurchase $1.5 billion of stock in the second quarter, doubling the $750 million targeted in the first three months of the year. The dividend was also raised by 5.9% to €0.90 per share, placing TotalEnergies among leading companies with growing dividends. This decision comes as oil prices surged, partly due to the Iran war, leading to a windfall for the company.
The company's adjusted net income reached $5.4 billion, exceeding analysts' expectations of $5 million and marking a 29% increase from the previous year. This performance was significantly bolstered by strong trading operations and a high commodity price environment. The refining and chemicals segment saw earnings more than quintuple to $1.6 billion, while the liquefied natural gas segment's earnings rose 2% to $1.3 billion, despite disruptions. Upstream exploration and production earnings increased by 5% to $2.58 billion, and the integrated power segment was up 8% at $545 million.
These robust profits and increased shareholder returns have drawn criticism from French politicians. The Socialist Party announced a proposal to tax companies' windfall profits during crises, and French junior energy minister Maud Bregeon stated that the government is considering new measures to address rising fuel prices, emphasizing that no super-profit should be realized in France. The company's stock, trading at 78.26 euros, had gained 40.78% year-to-date.
Looking ahead, TotalEnergies aims for a 40% payout and has authorized maintaining buybacks at $1.5 billion for the third quarter. The company expects to exceed its initial cash flow guidance of $32 billion, potentially reaching $35 billion to $40 billion for the year. However, the company noted caution due to the quick drop in crude oil prices to $70 per barrel following a memorandum of understanding in June. Other majors like Italian peer Eni have also increased buybacks, while some, like BP, have opted not to boost investor returns, and analysts anticipate prudence from Shell, Chevron, and ExxonMobil.
