France's Total Beats 3Q Profit Forecasts, CEO To Visit Oil Leaders
PARIS, Oct 29 (Reuters) - French oil company Total's new chief will visit oil-rich countries to cement links with their leaders after the sudden death of his predecessor and will go ahead with cost cuts after falling oil prices squeezed third-quarter profits.
Europe's second-largest oil company elevated former refining head Patrick Pouyanne to the top post following the death this month of its charismatic chief executive Christophe de Margerie in a plane crash in Russia.
Pouyanne said he would carry out de Margerie's plan to reduce capital expenditure and operating costs, aimed at returning more cash to shareholders.
"The recent decrease in the price of Brent highlights the importance of the programmes we launched to reduce costs and control investments to strengthen the resilience of the group," he said.
Third-quarter net adjusted profit fell 2 percent to $3.56 billion, hit by the oil price drop and not quite offset by a sharp increase in refining margins. But it beat the expectations of three analysts for $3.36-$3.37 billion.
"Much of the credit for that goes to the incoming CEO, who has successfully lowered Total's breakeven point in the (downstream) division via his cost reduction initiatives," BMO analyst Iain Reid wrote in a note.
Although Total's much larger exploration and production division would be a harder nut to crack, Pouyanne had a good chance of successfully driving similar reductions across the rest of the business, Reid wrote.
Shares in the biggest French company by market value rose as much as 2.2 percent, outperforming a 0.5 percent increase in the European oil and gas sector.
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