TotalEnergies (TTE.US) Q3 profit doubles to $9.1 billion, refining margins soar to historic highs.

French oil giant TotalEnergies (TTE.US) reported third-quarter results on October 29 showing adjusted net profit of $9.1 billion, up 127% year-on-year, the highest level since the first quarter of 2022 and up 51% quarter-on-quarter, more than double the roughly $4 billion of the year-earlier period, and above the $8.3 billion consensus of 12 analysts compiled by LSEG, benefiting from reduced global refined product supply after the U.S. and Israel war against Iran. IFRS net profit was $8.26 billion, more than doubling year-on-year and a single-quarter record. Operating cash flow excluding working capital changes was $12.26 billion, up 25% quarter-on-quarter, and the gearing ratio fell to 9.1% from 13.1% at the end of the second quarter. As of press time, the company's shares were up 2% at $94.71, underperforming the European energy sector. TotalEnergies is up about 50.4% year-to-date. Downstream was a highlight of the quarter, driven by the European refining margin indicator rising to $33.2 per barrel (2.5 times quarter-on-quarter) and refinery throughput increasing nearly 10%, with downstream adjusted net operating profit reaching $4.07 billion, up 77% quarter-on-quarter and a single-quarter record. Integrated LNG segment profit rose 2.3 times quarter-on-quarter to $1.89 billion, with the average LNG price up 20% quarter-on-quarter to $12.28 per million British thermal units, and the trading business outperforming expectations for a third consecutive quarter. Exploration and production segment profit was $3.16 billion; oil and gas production was 2.474 million barrels of oil equivalent per day, up 3% quarter-on-quarter and up more than 4% year-on-year excluding the impact of the Middle East conflict (which dragged by an average of about 5% in the quarter). The company expects the average LNG price in the fourth quarter to exceed $14 per million British thermal units, production growth of more than 3% excluding the Middle East impact, and net investment of about $15 billion maintained in 2026. In the quarter, the company took final investment decisions on Cyprus's Cronos, Nigeria's Ima, the UAE's Umm Shaif and Azerbaijan's Absheron Phase 2, and all projects to achieve the target of more than 3% annual production growth by 2030 have entered the execution stage. TotalEnergies had flagged in October that third-quarter profit would be boosted by refining margins nearly quadrupling from a year earlier to $33.2 per barrel and by higher liquefied natural gas revenue. The company said its refining and chemicals division profit was $3.6 billion, more than five times that of a year earlier and double the previous quarter. Refinery throughput rose nearly 10%, allowing the company to fully capture refining margins at historic highs in Europe and globally. On shareholder returns, the company confirmed a third interim dividend of 0.90 euros per share (up 5.9% year-on-year) and raised its fourth-quarter and first-quarter 2027 buyback allocations to $2.5 billion each for cancellation; it also announced a targeted share issuance to employees at a 20% discount. TotalEnergies reiterated its $25 billion share buyback plan for the fourth quarter and said it would buy back another $25 billion in the first quarter of 2027, at the high end of the guidance range given last month. Peer Shell (SHEL.US) also reported better-than-expected profit on Thursday, with its reported third-quarter 2026 results showing non-GAAP adjusted net profit of $10.814 billion, up 99% year-on-year and above analysts' forecast of about $10.33 billion. This is the company's highest single-quarter profit since the first months after the full-scale Russia-Ukraine war began in early 2022, and its second-highest quarterly earnings in history.