TotalEnergies Q3 Earnings Call Highlights

Key Points

• Strong Q3 performance: Adjusted net income rose to $9.1 billion, while operating cash flow reached $12.3 billion, supported by higher oil, gas and refining prices. Record refining margins drove downstream earnings, and production grew more than 3% quarter over quarter to 2.47 million barrels of oil equivalent per day.
• Higher cash-flow outlook and shareholder returns: TotalEnergies raised its 2026 cash-flow forecast to more than $42 billion while maintaining $15 billion in net investment guidance. The company returned $3.7 billion to shareholders, increased its interim dividend nearly 6%, and authorized another $5 billion in buybacks across the fourth quarter and first quarter of 2027.
• LNG and power businesses remain strategic growth drivers: Strong LNG pricing and trading offset lower production caused by maintenance, while Integrated Power operating cash flow rose 7% sequentially. Management expects Integrated Power to generate about $3 billion in full-year cash flow and become free-cash-flow positive in 2027.

TotalEnergies NYSE: TTE reported third-quarter results marked by higher cash flow, record downstream earnings and continued production growth, as elevated oil, gas and refining prices supported its integrated operating model.

Chairman and CEO Patrick Pouyanné said market conditions were favorable across the company’s commodity portfolio, while operational performance enabled TotalEnergies to capture high prices and margins. He cited the company’s integration across upstream production, trading, refining and liquefied natural gas, as well as its geographic diversification, as key advantages during disruption in the Middle East.

Adjusted net income reached $9.1 billion in the third quarter, up more than 50% from the second quarter, while cash flow from operations totaled $12.3 billion, Chief Financial Officer Jean-Pierre Sbraire said. Return on equity was 19.6% and return on average capital employed was 17.4%.

Commodity prices and production

Sbraire said Brent crude averaged $97 per barrel in the quarter, compared with $104 per barrel in the preceding quarter. The company’s average liquid selling price was $87 per barrel, reflecting elevated freight costs. European gas benchmark TTF averaged $21.50 per million British thermal units, up 38% from the second quarter, while TotalEnergies’ average LNG price rose 20% to $12.30 per million BTU.

European refining margins averaged a record $33 per barrel, 2.5 times the prior-quarter level, according to Sbraire. He attributed the increase to unavailable Russian refining capacity, disrupted Middle East supplies and low global product inventories.

Hydrocarbon production totaled 2.47 million barrels of oil equivalent per day. Production grew more than 3% quarter over quarter, despite an estimated 5% impact from the Middle East conflict, at the lower end of the company’s prior 5%-to-10% guidance range. Excluding the conflict’s impact, management said year-over-year output growth would have exceeded 4%.

TotalEnergies said projects launched since early 2025 supported growth, while new final investment decisions in Cyprus, Nigeria, Abu Dhabi and Azerbaijan advanced the company’s longer-term production plans. Pouyanné said the company sees a production plateau of 3 million barrels of oil equivalent per day from 2030 through 2035 and has “no urgency” to add resources to support its stated post-2030 growth ambitions.

Record downstream results and LNG strength

The refining and chemicals segment posted adjusted net operating income of $3.6 billion and cash flow of $3.9 billion. Refinery throughput rose nearly 10% from the prior quarter as facilities in Europe and the U.S. performed well and the SATORP refinery in Saudi Arabia returned to nominal capacity at the end of the quarter.

Pouyanné said TotalEnergies expects similar refining treatment levels in the fourth quarter. However, he reiterated that the company does not plan to build new refineries, though the recent margin environment could affect decisions regarding the retention of existing capacity.

Integrated LNG adjusted net operating income was $1.9 billion and cash flow was $1.7 billion. LNG production declined 7% quarter over quarter, primarily because of maintenance at Angola LNG and Ichthys LNG, but higher prices and gas and LNG trading performance more than offset the volume decline.

Management expects the average LNG selling price to exceed $14 per million BTU in the fourth quarter, with Pouyanné saying the company anticipated trading performance in a similar range to the third quarter. He said TotalEnergies’ diversified LNG portfolio and shipping fleet helped it meet customer commitments despite lost Qatari volumes and without declaring force majeure to LNG customers.

The company also established an LNG marketing joint venture with Kumul Petroleum in Papua New Guinea covering 2.4 million tons per year and signed an offtake agreement for 1.5 million tons per year.

Cash flow, investment and shareholder returns

TotalEnergies raised its full-year 2026 cash-flow outlook to more than $42 billion, with Pouyanné saying it could reach about $43 billion depending on market conditions. Net investment was $3.3 billion in the third quarter, and the company maintained its full-year net-investment guidance of $15 billion.

The company returned $3.7 billion to shareholders during the quarter, including $2.2 billion in dividends and $1.5 billion in buybacks. Net debt declined, helped by free cash flow after dividends of more than $6 billion and a $3.1 billion positive working-capital contribution. Gearing improved by four percentage points to 9.1%.

The board confirmed a third interim dividend of €0.90 per share, up 5.99% from 2025. It also authorized $2.5 billion in buybacks for the fourth quarter and a further $2.5 billion for the first quarter of 2027.

Pouyanné said the board remains committed to returning 40% of cash flow to shareholders. If full-year cash flow exceeds the level covered by planned dividends and buybacks, the board could consider an uplift to the final dividend, rather than a separate special dividend.

Integrated Power and project updates

Integrated Power generated nearly $800 million of operating cash flow in the quarter, up 7% sequentially, supported by a full-quarter contribution from TTEP, the company’s joint venture with EPH. Net power generation reached 44.3 terawatt-hours over the first nine months, up 25% year over year, and TotalEnergies reiterated its goal of exceeding 60 terawatt-hours for the full year.

Pouyanné said planned farm-down transactions with KKR involving nearly 2 gigawatts of assets in Europe and the U.S. represented an enterprise value of about $3 billion. He said Integrated Power was expected to generate about $3 billion in cash flow for the full year and remain on track to become free-cash-flow positive in 2027.

Elsewhere, management said Uganda’s Kingfisher project was expected to start in the first half of 2027 after equipment delays linked to transit through the Strait of Hormuz. In Iraq, TotalEnergies said Ratawi production had surpassed 100,000 barrels per day and that the project’s first phase was expected to reach 120,000 barrels per day by November.

About TotalEnergies (NYSE:TTE)

TotalEnergies SE is a French multinational energy company that explores for, produces, processes and markets oil and natural gas. Established in 1924 as the Compagnie française des pétroles, the company adopted the TotalEnergies name in 2021 to reflect its broader focus on multiple forms of energy.

The company's activities include liquefied natural gas, refining and petrochemicals, fuels, lubricants, and the operation of service stations. TotalEnergies also develops and sells electricity from renewable and other power-generation sources, including solar and wind projects, as well as energy-storage and electric-vehicle charging solutions.

TotalEnergies serves customers and operates projects across numerous regions, including Europe, Africa, the Middle East, the Americas and the Asia-Pacific region.

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