French oil and gas heavyweight TotalEnergies has recently registered a notable decline in its full-year earnings for 2024, primarily driven by lower crude oil prices and a softening demand for fuel. The company’s adjusted net income for the year peaked at $18.3 billion, marking a 21% drop from the $23.2 billion reported in 2023. This downturn highlights the persistent challenges facing the energy sector, especially in a climate of fluctuating commodity prices and inconsistent global consumption patterns.
Although TotalEnergies faced a challenging full year, the company was able to deliver a somewhat positive fourth quarter. They reported an adjusted net income of $4.4 billion for the final quarter, reflecting an 8% increase from the previous quarter. This performance can largely be attributed to the robust contributions from their integrated liquefied natural gas (LNG) and integrated power sectors. This uptick was crucial as it marked a departure from a concerning trend of consecutive quarterly income declines that had resulted in a three-year low by September.
In terms of overall net income, TotalEnergies documented a drop from $21.4 billion in the previous year to $15.8 billion in 2024. Despite this decline, the company announced a 7% increase in its dividend, now set at €3.22 ($3.35) per share. This move aims to reassure investors and signal the company’s commitment to returning capital in a period of contraction.
Though analysts had predicted a slightly lower adjusted net income of $18.2 billion, TotalEnergies managed to slightly outperform those expectations. Factors contributing to this surprising performance included a modest uptick in hydrocarbon production, enhanced gas trading capabilities, and improved refining margins. The strategic foresight of anticipating these factors has underscored the company’s adaptability within a volatile market environment.
TotalEnergies is focused on navigating the ever-evolving energy landscape as it prepares to implement further dividend increases and share buybacks, targeting $2 billion in share repurchases per quarter beginning in 2025. This strategy reflects a broader confidence in the company’s future prospects, particularly due to anticipated increases in gas prices and strong hydrocarbon production.
The challenges faced by TotalEnergies resonate throughout the global oil and gas industry. In 2022, the sector profited from extraordinary market conditions, driven by geopolitical tensions and an unprecedented surge in oil prices. However, as conditions normalize, companies are now grappling with diminishing returns. Brent crude futures averaged around $80 per barrel for 2024, slightly below the previous year’s prices, prompting various industry players to recalibrate expectations and strategies.
The recent earnings reports from other energy giants have exhibited a mixed bag of fortunes, reinforcing the unpredictability of the industry. For instance, while Exxon Mobil managed to exceed profit expectations, rivals such as Chevron and Shell failed to meet analyst forecasts, showcasing the divergent paths taken by these companies against a backdrop of shared pressures.
TotalEnergies’ recent performance underscores the complexities of the modern energy sector, characterized by fluctuating prices and changing market demands. The company has demonstrated resilience through targeted growth strategies and a focus on integrated LNG and power, even as it confronts downward pressure on its earnings.
In the broader context, as global energy markets continue to evolve, TotalEnergies is positioned uniquely to capitalize on its well-established pipeline of projects, particularly in renewables. However, the effectiveness of its approach will largely depend on external market conditions and the company’s ability to adapt accordingly. Analysts like Maurizio Carulli from Quilter Cheviot suggest that the long-term growth profile remains promising, driven by TotalEnergies’ strategic investments in sustainable energy solutions. The future will tell if this adaptability proves sufficient to weather the storms of market volatility.