Eni SpA (E), Italy's biggest oil and natural gas company by market capitalization, Friday said first-quarter net profit tumbled 43% on the year, but beat expectations, as crude prices slumped and on weaker hydrocarbon production.
Shares gained in Milan as investors brushed aside Eni's trimming of its 2009 output growth estimate to about 3% from an earlier expectation of 3.5%.
At 0755 GMT, Eni shares gained EUR0.51, or 3.4%, at EUR15.49, about twice as much as the benchmark S&PMib Index.
In a statement, the Rome-based company said net profit in the first three months of the year dropped to EUR1.90 billion compared with EUR3.32 billion in the same period of the year before.
Net sales from operations fell to EUR23.7 billion, or 16% lower than the EUR28.3 billion reported in the equivalent 2008 period.
Eni said adjusted net profit, the income figure that is most closely watched by analysts and excludes changes in the value of inventories and special items, slipped 42% to EUR1.76 billion from EUR3.05 billion in the equivalent period of 2008.
The adjusted net profit figure was above expectations of EUR1.58 billion, according to an average of 10 analysts polled by Dow Jones Newswires.
"We all knew there was going to be a fall and it was less than we expected," said Gianpaolo Rivano, a fund manager at Gesti-Re in Milan. "The first-quarter figures are nothing to worry about."
The hydrocarbon output for the period averaged 1.779 million barrels of oil equivalent a day, down from the 1.796 million posted in the first-quarter of 2008.
Eni will hold a conference call Friday at 1000 GMT on the results. Analysts said they will focus on possible comments on acquisition opportunities and capital expenditure after OAO Gazprom (GAZP.RS) agreed this month to pay Eni $4.2 billion for the fifth of OAO Gazprom Neft (SIBN.RS) the Rome-based company owned.
Capital expenditure for 2009 is forecast to be lower than the EUR14.6 billion it posted last year. Capex in the first quarter was EUR3.15 billion, it added.
Net debt at Eni was EUR16.5 billion on March 31, or EUR1.85 billion less from three months earlier, it said.
Eni, which is controlled by the Italian government with a 30% stake, said it sees its debt-to-equity ratio at the end of the year at a "slight" increase from the 0.38 it reported last December. It's confident of keeping its current credit rating.
In a separate statement, Eni said its board approved selling one or more bonds for a value of up to EUR2 billion to the Italian retail market by April 2010 to better balance its short-term and longer term debt.
The share price is roughly 6% lower over the last three months, underperforming the 6% gain in Italy's benchmark S&PMib Index, as investors are were spooked by lower oil and gas prices.