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 Diamondback (FANG) Up 10.1% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Diamondback Energy (FANG - Free Report) . Shares have added about 10.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Diamondback due for a pullback? 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 catalysts.
Diamondback Q4 Earnings and Revenues Top Estimates
Diamondback reported fourth-quarter 2021 adjusted earnings per share of $3.63, beating the Zacks Consensus Estimate of $3.38 and significantly above the year-earlier period’s profit of 82 cents.
The outperformance reflects higher-than-expected production, which was partly offset by escalating costs. Precisely, FANG’s average Q4 output came in at 387,065 barrels of oil-equivalent per day (BOE/d), ahead of the consensus mark of 375,551 BOE/d.
Revenues of $2 billion outpaced the Zacks Consensus Estimate by 23.3% and surged 163% from the year-ago quarter’s sales of $769 million.
In more news for investors, the company is using the excess cash from a supportive environment to reward them with dividends and buybacks. As part of that, FANG’s board of directors declared a quarterly cash dividend of 60 cents per share to its common shareholders of record on Mar 4. The payout, which represents a 20% sequential increase, will be made on Mar 11. The company also executed $409 million of share repurchases during the fourth quarter of 2021 at $105.96 apiece.
Production & Realized Prices
FANG’s production of oil and natural gas averaged 387,065 BOE/d, which comprises 58% oil. The figure rose 29.5% from the year-ago quarter and also surpassed the Zacks Consensus Estimate of 375,551 BOE/d. While crude output was up 28.7% year over year, natural gas volumes improved 32.7% year over year.
The average realized oil price during the fourth quarter was $74.50 per barrel, 92.8% higher than the year-ago realization of $38.64 but a touch below the consensus mark of $75. Meanwhile, the average realized natural gas price jumped to $4.56 per thousand cubic feet (Mcf) from $1.35 in the year-ago period but again missed the Zacks Consensus Estimate of $4.87. Overall, the company fetched $56.47 per barrel compared with $27.41 a year ago.
Costs & Financial Position
Diamondback’s fourth-quarter cash operating cost was $10.17 per barrel of oil equivalent (BOE), up 48% from the prior-year quarter. Lease operating expense was $4.21 per BOE, compared with $3.38 in the fourth quarter of 2020. FANG’s production taxes almost doubled year over year to $3.40 per BOE. Gathering and transportation expenses increased in the fourth quarter of 2021 to $1.63 per BOE from $1.27 at the end of 2020.
Diamondback spent $434 million in capital expenditure — $347 million on drilling and completion, $80 million on infrastructure and $7 million on midstream. The company booked $772 million of free cash flows in the fourth quarter.
As of Dec 31, the Permian-focused operator had approximately $654 million in cash and cash equivalents, and $6.6 billion in long-term debt, representing a debt-to-capitalization of 33.4%.
Guidance
In 2022, FANG said it looks to pump 369,000-376,000 BOE/d of hydrocarbon, with the midpoint approximately 4% below the Q4 average. Of this, oil volumes are likely to be 218,000-222,000 barrels per day. The company forecast a capital spending budget between $1.75 billion and $1.9 billion, which represents an increase from the 2021 actual figure of $1.5 billion. Finally, stressing on its shareholder return program, Diamondback has committed to return half of the free cash flow through dividends and buybacks.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Diamondback has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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, Diamondback 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 Diamondback (FANG) Up 10.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Diamondback Energy (FANG - Free Report) . Shares have added about 10.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Diamondback due for a pullback? 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 catalysts.
Diamondback Q4 Earnings and Revenues Top Estimates
Diamondback reported fourth-quarter 2021 adjusted earnings per share of $3.63, beating the Zacks Consensus Estimate of $3.38 and significantly above the year-earlier period’s profit of 82 cents.
The outperformance reflects higher-than-expected production, which was partly offset by escalating costs. Precisely, FANG’s average Q4 output came in at 387,065 barrels of oil-equivalent per day (BOE/d), ahead of the consensus mark of 375,551 BOE/d.
Revenues of $2 billion outpaced the Zacks Consensus Estimate by 23.3% and surged 163% from the year-ago quarter’s sales of $769 million.
In more news for investors, the company is using the excess cash from a supportive environment to reward them with dividends and buybacks. As part of that, FANG’s board of directors declared a quarterly cash dividend of 60 cents per share to its common shareholders of record on Mar 4. The payout, which represents a 20% sequential increase, will be made on Mar 11. The company also executed $409 million of share repurchases during the fourth quarter of 2021 at $105.96 apiece.
Production & Realized Prices
FANG’s production of oil and natural gas averaged 387,065 BOE/d, which comprises 58% oil. The figure rose 29.5% from the year-ago quarter and also surpassed the Zacks Consensus Estimate of 375,551 BOE/d. While crude output was up 28.7% year over year, natural gas volumes improved 32.7% year over year.
The average realized oil price during the fourth quarter was $74.50 per barrel, 92.8% higher than the year-ago realization of $38.64 but a touch below the consensus mark of $75. Meanwhile, the average realized natural gas price jumped to $4.56 per thousand cubic feet (Mcf) from $1.35 in the year-ago period but again missed the Zacks Consensus Estimate of $4.87. Overall, the company fetched $56.47 per barrel compared with $27.41 a year ago.
Costs & Financial Position
Diamondback’s fourth-quarter cash operating cost was $10.17 per barrel of oil equivalent (BOE), up 48% from the prior-year quarter. Lease operating expense was $4.21 per BOE, compared with $3.38 in the fourth quarter of 2020. FANG’s production taxes almost doubled year over year to $3.40 per BOE. Gathering and transportation expenses increased in the fourth quarter of 2021 to $1.63 per BOE from $1.27 at the end of 2020.
Diamondback spent $434 million in capital expenditure — $347 million on drilling and completion, $80 million on infrastructure and $7 million on midstream. The company booked $772 million of free cash flows in the fourth quarter.
As of Dec 31, the Permian-focused operator had approximately $654 million in cash and cash equivalents, and $6.6 billion in long-term debt, representing a debt-to-capitalization of 33.4%.
Guidance
In 2022, FANG said it looks to pump 369,000-376,000 BOE/d of hydrocarbon, with the midpoint approximately 4% below the Q4 average. Of this, oil volumes are likely to be 218,000-222,000 barrels per day. The company forecast a capital spending budget between $1.75 billion and $1.9 billion, which represents an increase from the 2021 actual figure of $1.5 billion. Finally, stressing on its shareholder return program, Diamondback has committed to return half of the free cash flow through dividends and buybacks.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Diamondback has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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, Diamondback has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.