Investing.com -- Paris-listed shares in France's TotalEnergies (EPA:TTEF) rose in European trading on Friday after the energy group reported profit in the first quarter that topped expectations despite falling by 22%.
In the three months until the end of March, adjusted net income came in at $5.1 billion, just above consensus estimates of $5 billion.
Natural gas prices in Europe have slipped by 45% in the past year due in part to waning supply concerns, hitting profits at oil and gas firms like Total .
Meanwhile, analysts at Morgan Stanley noted that Total's gearing ratio, a measure of net debt, jumped from 5% at the start of the quarter to 10.5% by the end of the period following a $5.7 billion working capital outflow.
"This alone explains 470bp out of the 550bp in gearing," the Morgan Stanley analysts said. However, Total expects this trend to reverse in the second quarter.
Hydrocarbon production, which was relatively stable compared to the prior quarter at 2.46 million barrels of oil equivalent per day (mboed), is seen dipping to 2.40 to 2.45 mboed in the current quarter. Total said this was because of "planned maintenance."
Total flagged that Brent crude prices, which have been elevated by geopolitical tensions and production quotas set by the OPEC+ oil group, are impacting refining margins as well.