By Nia Williams and Rithika Krishna
CALGARY, Alberta (Reuters) -Canada's Imperial Oil Ltd said its third-quarter profit more than doubled from the prior quarter on Friday, boosted by a rally in global crude prices, higher output and increased demand for motor fuels.
However, Imperial's shares fell more than 6% on the Toronto Stock Exchange. Analysts said the decline was down to the company reporting lower-than-expected cash flow per share and keeping its dividend unchanged.
Imperial's rival Suncor Energy doubled its dividend this week, raising expectations that other Canadian oil majors would follow suit.
"No changes to the dividend or share repurchases were announced, which we believe the market wants to see in light of Suncor's move," Eight Capital Research analyst Phil Skolnick said in a note.
Shares in Calgary-based Imperial, which is majority-owned by Exxon Mobil Corp, were last down 6.6% on the Toronto Stock Exchange at C$42.13.
Oil prices have rallied nearly 63% so far this year, with benchmark Brent crude near multi-year highs, fueled by a strong rebound in consumption as economies gradually open up after pandemic lockdowns, and amid an ongoing global energy squeeze. [O/R]
Despite strong commodity prices, investors are rewarding companies for being disciplined with their capital, and many North American energy firms are returning growing free cash flow to shareholders rather than investing in new production.
Chief Financial Officer Daniel Lyons told an earnings call Imperial is "actively evaluating options" to return more cash to shareholders, including paying a special dividend.
Imperial said net income rose to C$908 million ($735.34 million), or C$1.29 per share, in the quarter ended Sept. 30, from C$366 million, or 50 Canadian cents per share, in the second quarter.
But cash flow per share was C$2.14, below consensus estimates of C$2.24, analysts said.
Imperial's third quarter production was 435,000 barrels of oil equivalent per day, up about 8% from the second quarter. Throughput at its refineries averaged 404,000 barrels per day, compared with 332,000 bpd in the second quarter.
The company lowered its 2021 capital budget to C$1.1 billion, down from a previous forecast of C$1.2 billion.
($1 = 1.2348 Canadian dollars)
(Reporting by Nia Williams in Calgary and Rithika Krishna in BengaluruEditing by Marguerita Choy)