Nexen Corp.May 13, 2008 | Comments : 0 Recommended this article: (0)
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Nexen Corp. explores and produces both natural gas and crude oil. The company has core oil and gas locations in the Gulf of Mexico, Canada and the North Sea. Nexen was officially formed in 1971, has a market cap. of $20 billion and is headquartered in Alberta, Canada.
Excellent First-Quarter Results
Net income was up a staggering 421% from the same period last year, to $639 million. This increase was partially facilitated by the company's increase in production, up 12% from last year to 267,000 barrels daily.
Cash flow from operations totaled $1,039 million after $392 million in current income taxes.
This produced earnings of $1.18 per share, well ahead of analyst projections, who were looking for 94 cents. This marks the fourth time in four quarters that Nexen has surprised and beaten estimates, having done so by an average of 13 cents, or 17%.
Charlie Fischer, Nexen's President and Chief Executive Officer. "With strong first quarter production and the ramp up of Long Lake and Ettrick later this year, we are well positioned to meet our annual guidance range of 260,000 boe/d to 280,000 boe/d," commented Fischer.
Cash In Hand, Bullish Guidance
Nexel also noted that in 2008 it expects to generate substantial cash flow in excess of capital investments that can be used to reduce debt, fund additional capital investment programs and repurchase shares.
With the solid quarterly results in hand, the analyst community has been upgrading its earnings estimates. Within just the last 30 days, the current-yea estimate has gained 53 cents and advanced to its current projection of $3.58 per share.
As one might speculate, shares of NXY have been on a very nice rally after bottoming out on Mar 20 just below $28. Since then, shares haven advanced past the $38 mark, an impressive short-term return of more than 35%. This is a new 52-week and all-time high. Moving forward, these shares should have the earnings growth required to support its continued ascent. Take a look at the chart below.
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