ConocoPhillips (NYSE: COP) reported third-quarter 2014 results before markets opened Thursday. The oil and gas production company posted adjusted diluted earnings per share (EPS) of $1.29 on revenues of $12.92 billion. In the same period a year ago, the company reported EPS of $1.47 on revenues of $15.47 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.20 on revenues of $13.63 billion.

Including the sale of the company’s Nigerian assets, Conoco posted a profit of $2.7 billion, or $2.17 a share. The Nigerian sale accounted for $0.87 of the EPS. In the year ago quarter the company posted GAAP EPS of $2.00.

Conoco boosted its dividend in July from $0.69 per quarter to $0.73 and now boasts a dividend yield of 4.20%, the best of the major U.S. oil companies.

The company’s outlook for 2014 calls for 3% to 5% volume and margin growth in 2014. Full-year 2014 production from continuing operations, excluding Libya, is expected to be approximately 1.525 million to 1.535 million barrels of oil equivalent per day. Fourth-quarter 2014 production guidance is 1.545 million to 1.575 million barrels of oil equivalent per day. The consensus analysts’ estimate calls for fourth-quarter EPS of $1.24 on revenues of $14.94 billion. For the full year, analysts estimate EPS of $5.92 on revenues of $58.69 billion.

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Production during the quarter came in at 1.473 million barrels of oil equivalent per day (excluding Libyan production), within the company’s estimate of 1.435 million to 1.485 million barrels. Crude oil production fell from 571,000 barrels a day in the third quarter of 2013 to 565,000 in 2014. Natural gas production also dropped, from 4.06 billion cubic feet per day to 3.89 billion cubic feet.

Price realizations were also lower, both year-over-year and sequentially, as we expected they would be. In the third quarter of 2013, Conoco’s realized price for a barrel of crude was $106.74. That dropped to $103.53 a barrel in the second quarter of this year and fell further to $96.67 in the third quarter.

Year over year, price realizations for natural gas liquids fell from $40.47 per barrel to $37.66 a barrel. Bitumen’s realized prices fell from $76.06 to $62.49 and natural gas prices rose $0.03, from $5.88 per thousand cubic feet to $5.91.

Exploration expenses rose from $165 million in the United States to $340 million, and internationally expenses fell from $148 million to $119 million. Conoco is not putting all its eggs in a U.S. basket, but that is where most are going.

The company’s CEO said:

ConocoPhillips is well positioned in the current environment to deliver 3 to 5 percent volume and margin growth with an attractive dividend. We have completed a significant transformation that provides us with strong base assets and a high-quality inventory of investment opportunities. Importantly, we expect strong growth in 2015 driven by ongoing success in the North American unconventionals and startup of several major projects.

Conoco beat the EPS estimate by nine cents. In the past 90 days, that estimate had dropped nearly 30 cents. The company’s total realized price fell from $69.68 per barrel of oil equivalent to $64.78 per barrel year-over-year. Keep an eye on revenue, not EPS. That is where the rubber hits the road for the oil guys.

Conoco’s shares were inactive in Thursday’s premarket, after closing previously at $70.75 in a 52-week range of $62.74 to $87.09. Thomson Reuters had a consensus analyst price target of around $88.20 before the latest earnings report.

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