OAO Lukoil (LUKOY) fell for the first time in four days in U.S. trading as IFC Metropol cut shares of Russia’s second-largest oil producer to “hold” from “buy” after it reported a decline in fourth-quarter profit.
American depositary receipts of Lukoil dropped 0.6 percent to $65.01 at 4:57 p.m. in New York, the biggest drop since Feb. 22.
Moscow-based Lukoil had fourth-quarter net income of $1.35 billion, down from $2.19 billion in the same period a year earlier, according to a filing on March 1. That missed the average $2.69 billion estimate of 15 analysts in a Bloomberg survey.
The company’s fourth-quarter lifting costs increased 6 percent to $4.60 a barrel and climbed 14 percent in 2011, the “sharpest rise” among Russian oil companies, Moscow-based Metropol analysts Sergey Vakhrameev and Natalia Poskrebysheva wrote in a research report today.
Lukoil recorded an impairment charge of $955 million in the fourth quarter at its OOO Narianmarneftegaz venture with ConocoPhillips. (COP) Fourth-quarter operating cash flow dropped 56 percent to $2.2 billion, with capital expenditure rising 33 percent to $2.7 billion, the company said.
“The cash flow wasn’t good in the fourth quarter,” Poskrebysheva said by phone today. “The capital expenditure is quite big, which we hope they’ll explain in the middle of March at the investor conference. Right now it’s unclear what they’re going to spend it on.”
The company’s stock on Moscow’s Micex Index added 0.9 percent to 1,909.20 rubles, or the equivalent of $65.05. One Lukoil ADR is equal to one ordinary share.
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