We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Hess (HES) Down 13.2% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Hess (HES - Free Report) . Shares have lost about 13.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hess due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hess Beats Q2 Earnings on Higher Oil Prices
Hess Corporation reported adjusted second-quarter 2021 earnings per share of 24 cents, beating the Zacks Consensus Estimate of 19 cents and improving from the year-ago loss of $1.05.
Quarterly revenues increased to $1,598 million from $842 million a year ago. The top line also beat the Zacks Consensus Estimate of $1,508 million.
Its strong second-quarter results were supported by higher commodity price realizations despite encountering lower crude oil and natural gas liquids production.
Operational Update
Exploration and Production
For the quarter under review, the Exploration and Production business reported adjusted earnings of $122 million against a loss of $249 million a year ago. The business was favored by higher realized commodity prices.
Quarterly hydrocarbon production was 328 thousand barrels of oil equivalent per day (MBoe/d), down from 334 MBoe/d in the year-ago period owing to lower contributions from Gulf of Mexico and the Bakken play.
Crude oil production decreased from 183 thousand barrels per day (MBbls/d) in second-quarter 2020 to 166MBbls/d. Also, natural gas liquids production totaled 57 MBbls/d, down from 63 MBbls/d in the prior-year quarter. Nonetheless, natural gas output was 632 thousand cubic feet per day (Mcf/d), up from 528 Mcf/d a year ago.
Worldwide crude oil realization per barrel of $64.27 (excluding the impact of hedging) improved from $20.63 in the year-ago period. Also, worldwide natural gas prices rose to $4.05 per Mcf from the year-ago figure of $2.41. The average worldwide natural gas liquids selling price increased to $23.12 per barrel from $7.32 a year ago.
Midstream
From the midstream business, the company generated adjusted net earnings of $76 million, significantly up from $51 million a year ago on improvement in tariff rates and minimum volume commitments.
Operating Expenses
Operating expenses for the second quarter totaled $315 million versus the year-ago level of $294 million. Marketing costs increased to $322 million from $56 million a year ago. Exploration expenses also increased to $48 million from $31 million in the year-ago period.
Total costs and expenses increased to $1,463 million for the quarter from $1,114 million a year ago.
Financials
Net cash flow from operations was $785 million for the second quarter, reflecting a significant improvement from the year-ago figure of $266 million. Hess’ capital expenditure for exploration and production activities totaled $429 million, down from $453 million in the prior-year quarter.
As of Jun 30, 2021, the company had $2,430 million in cash & cash equivalents, up from $1,866 million in the previous quarter. Its long-term debt was recorded at $7,712 million at second quarter-end, down sequentially from $8,273 million. Current maturity of the long-term debt is $511 million. Debt to capitalization at quarter-end was 56.4%.
Guidance
The company expects 2021 net production (excluding Libya) to be 295,000 Boe/d. It intends to increase rig count in the Bakken Shale Play to three in September. Total upstream expenditure is estimated at $1.9 billion.
In the September quarter, the company expects to receive $375 million in net proceeds following Hess Midstream LP’s decision to repurchase a significant number of Hess Midstream Operations LP units.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -30.2% due to these changes.
VGM Scores
Currently, Hess has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Hess has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Hess (HES) Down 13.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Hess (HES - Free Report) . Shares have lost about 13.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hess due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hess Beats Q2 Earnings on Higher Oil Prices
Hess Corporation reported adjusted second-quarter 2021 earnings per share of 24 cents, beating the Zacks Consensus Estimate of 19 cents and improving from the year-ago loss of $1.05.
Quarterly revenues increased to $1,598 million from $842 million a year ago. The top line also beat the Zacks Consensus Estimate of $1,508 million.
Its strong second-quarter results were supported by higher commodity price realizations despite encountering lower crude oil and natural gas liquids production.
Operational Update
Exploration and Production
For the quarter under review, the Exploration and Production business reported adjusted earnings of $122 million against a loss of $249 million a year ago. The business was favored by higher realized commodity prices.
Quarterly hydrocarbon production was 328 thousand barrels of oil equivalent per day (MBoe/d), down from 334 MBoe/d in the year-ago period owing to lower contributions from Gulf of Mexico and the Bakken play.
Crude oil production decreased from 183 thousand barrels per day (MBbls/d) in second-quarter 2020 to 166MBbls/d. Also, natural gas liquids production totaled 57 MBbls/d, down from 63 MBbls/d in the prior-year quarter. Nonetheless, natural gas output was 632 thousand cubic feet per day (Mcf/d), up from 528 Mcf/d a year ago.
Worldwide crude oil realization per barrel of $64.27 (excluding the impact of hedging) improved from $20.63 in the year-ago period. Also, worldwide natural gas prices rose to $4.05 per Mcf from the year-ago figure of $2.41. The average worldwide natural gas liquids selling price increased to $23.12 per barrel from $7.32 a year ago.
Midstream
From the midstream business, the company generated adjusted net earnings of $76 million, significantly up from $51 million a year ago on improvement in tariff rates and minimum volume commitments.
Operating Expenses
Operating expenses for the second quarter totaled $315 million versus the year-ago level of $294 million. Marketing costs increased to $322 million from $56 million a year ago. Exploration expenses also increased to $48 million from $31 million in the year-ago period.
Total costs and expenses increased to $1,463 million for the quarter from $1,114 million a year ago.
Financials
Net cash flow from operations was $785 million for the second quarter, reflecting a significant improvement from the year-ago figure of $266 million. Hess’ capital expenditure for exploration and production activities totaled $429 million, down from $453 million in the prior-year quarter.
As of Jun 30, 2021, the company had $2,430 million in cash & cash equivalents, up from $1,866 million in the previous quarter. Its long-term debt was recorded at $7,712 million at second quarter-end, down sequentially from $8,273 million. Current maturity of the long-term debt is $511 million. Debt to capitalization at quarter-end was 56.4%.
Guidance
The company expects 2021 net production (excluding Libya) to be 295,000 Boe/d. It intends to increase rig count in the Bakken Shale Play to three in September. Total upstream expenditure is estimated at $1.9 billion.
In the September quarter, the company expects to receive $375 million in net proceeds following Hess Midstream LP’s decision to repurchase a significant number of Hess Midstream Operations LP units.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -30.2% due to these changes.
VGM Scores
Currently, Hess has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Hess has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.