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Ovintiv (OVV) Q1 Earnings Beat Estimates, Revenues Miss
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Ovintiv Inc. (OVV - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of $1.44, which beat the Zacks Consensus Estimate of $1.32. The beat can be attributed to lower expenses year over year. However, the bottom line declined from the year-ago level of $1.82 per share.
Total revenues of $2.4 billion decreased 7.8% from the year-ago quarter’s figure and missed the Zacks Consensus Estimate by 9.9%. This was due to a year-over-year decline in revenues from products and services.
OVV’s board of directors declared a quarterly dividend of 30 cents per share for its common shareholders of record as of Jun 14, 2024. The dividend will be paid out on Jun 28.
During the reported quarter of 2024, the company distributed $328 million to its shareholders, comprising $248 million in share repurchases and a base dividend of roughly $80 million.
Production & Prices
Total first-quarter production was 573,800 barrels of oil equivalent per day (BOE/d) compared with 511,400 BOE/d in the prior-year period. The figure beat our projection of 565,800 BOE/d.
The higher volumes can be attributed to a 6% year-over-year increase in natural gas production that amounted to 1,648 million cubic feet per day (MMcf/d). Production of liquids increased to 299,300 BOE/d.
Ovintiv's realized natural gas price was $2.56 per thousand cubic feet compared with the year-ago quarter’s figure of $3.80.However, the reported figure beat our projection of $2.41 per thousand cubic feet.
The realized oil price increased to $75.66 per barrel from $74.06 in the first quarter of 2023. The figure also beat our projection of $75.58.
Costs, Capex & Balance Sheet
Total expenses in the reported quarter decreased to $1.86 billion from the year-ago figure of $1.87 billion.
Ovintiv’s cash from operating activities in the quarter under review was $659 million, down from the year-ago figure of $1.1 billion. Its capital investments amounted to $591 million compared with $610 million in the year-ago period. Ovintiv generated non-GAAP free cash flow of $444 billion in the reported quarter.
As of Mar 31, the company had cash and cash equivalents worth $5 million and long-term debt of $5.5 billion. Its debt-to-capitalization at the end of the reported quarter was 37.7%.
Guidance
The energy company, which is primarily engaged in oil and gas exploration and production, expects capital expenditures in the range of $2.2-$2.4 billion for full-year 2024 and in the band of $610-$650 million for the second quarter.
This Zacks Rank #3 (Hold) company now projects crude oil and condensate volumes to be in the range of 202,000-208,000 barrels per day (bpd) for 2024 and in the band of 205,000-209,000 bpd for the second quarter. Natural gas production is estimated to be in the 1,600-1,650 MMcf/d range for the second quarter and between 1,600 MMcf/d and 1,650 MMcf/d for the entire year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the second quarter of 2024, share buybacks are expected to be worth $182 million.
Production Investment Plan 2024
To boost production from its assets, Ovintiv plans to invest approximately $1.35 to $1.45 billion in 2024 in the Permian asset to bring on 120 to 130 net wells and approximately $425 to $475 million in the Montney asset to bring on 60 to 70 net wells. Additionally, OVV plans to invest approximately $300 to $350 million in 2024 in the Uinta asset to bring on 25 to 30 net wells and approximately $100 to $125 million in the Anadarko asset to bring on seven to 10 net wells.
Important Energy Earnings So Far
While we have discussed the company’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
Independent oil and natural gas company Magnolia Oil & Gas Corporation (MGY - Free Report) announced first-quarter 2024 adjusted net income of 49 cents per share, which beat the Zacks Consensus Estimate of 44 cents. However, the bottom line deteriorated from the year-ago quarter’s level of 56 cents.
Total revenues came in at $319.4 million, which beat the Zacks Consensus Estimate of $308 million. The top line also improved 3.6% from $308.4 million recorded in the year-ago period. As of Mar 31, 2024, the company had cash and cash equivalents worth $399.3 million and long-term debt of $393.5 million, with debt to total capital of about 17.2%.
SLB (SLB - Free Report) , the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported first-quarter 2024 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure, however, was above our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.
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Ovintiv (OVV) Q1 Earnings Beat Estimates, Revenues Miss
Ovintiv Inc. (OVV - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of $1.44, which beat the Zacks Consensus Estimate of $1.32. The beat can be attributed to lower expenses year over year. However, the bottom line declined from the year-ago level of $1.82 per share.
Total revenues of $2.4 billion decreased 7.8% from the year-ago quarter’s figure and missed the Zacks Consensus Estimate by 9.9%. This was due to a year-over-year decline in revenues from products and services.
OVV’s board of directors declared a quarterly dividend of 30 cents per share for its common shareholders of record as of Jun 14, 2024. The dividend will be paid out on Jun 28.
During the reported quarter of 2024, the company distributed $328 million to its shareholders, comprising $248 million in share repurchases and a base dividend of roughly $80 million.
Production & Prices
Total first-quarter production was 573,800 barrels of oil equivalent per day (BOE/d) compared with 511,400 BOE/d in the prior-year period. The figure beat our projection of 565,800 BOE/d.
The higher volumes can be attributed to a 6% year-over-year increase in natural gas production that amounted to 1,648 million cubic feet per day (MMcf/d). Production of liquids increased to 299,300 BOE/d.
Ovintiv's realized natural gas price was $2.56 per thousand cubic feet compared with the year-ago quarter’s figure of $3.80.However, the reported figure beat our projection of $2.41 per thousand cubic feet.
The realized oil price increased to $75.66 per barrel from $74.06 in the first quarter of 2023. The figure also beat our projection of $75.58.
Costs, Capex & Balance Sheet
Total expenses in the reported quarter decreased to $1.86 billion from the year-ago figure of $1.87 billion.
Ovintiv’s cash from operating activities in the quarter under review was $659 million, down from the year-ago figure of $1.1 billion. Its capital investments amounted to $591 million compared with $610 million in the year-ago period. Ovintiv generated non-GAAP free cash flow of $444 billion in the reported quarter.
As of Mar 31, the company had cash and cash equivalents worth $5 million and long-term debt of $5.5 billion. Its debt-to-capitalization at the end of the reported quarter was 37.7%.
Guidance
The energy company, which is primarily engaged in oil and gas exploration and production, expects capital expenditures in the range of $2.2-$2.4 billion for full-year 2024 and in the band of $610-$650 million for the second quarter.
This Zacks Rank #3 (Hold) company now projects crude oil and condensate volumes to be in the range of 202,000-208,000 barrels per day (bpd) for 2024 and in the band of 205,000-209,000 bpd for the second quarter. Natural gas production is estimated to be in the 1,600-1,650 MMcf/d range for the second quarter and between 1,600 MMcf/d and 1,650 MMcf/d for the entire year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the second quarter of 2024, share buybacks are expected to be worth $182 million.
Production Investment Plan 2024
To boost production from its assets, Ovintiv plans to invest approximately $1.35 to $1.45 billion in 2024 in the Permian asset to bring on 120 to 130 net wells and approximately $425 to $475 million in the Montney asset to bring on 60 to 70 net wells. Additionally, OVV plans to invest approximately $300 to $350 million in 2024 in the Uinta asset to bring on 25 to 30 net wells and approximately $100 to $125 million in the Anadarko asset to bring on seven to 10 net wells.
Important Energy Earnings So Far
While we have discussed the company’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
Independent oil and natural gas company Magnolia Oil & Gas Corporation (MGY - Free Report) announced first-quarter 2024 adjusted net income of 49 cents per share, which beat the Zacks Consensus Estimate of 44 cents. However, the bottom line deteriorated from the year-ago quarter’s level of 56 cents.
Total revenues came in at $319.4 million, which beat the Zacks Consensus Estimate of $308 million. The top line also improved 3.6% from $308.4 million recorded in the year-ago period. As of Mar 31, 2024, the company had cash and cash equivalents worth $399.3 million and long-term debt of $393.5 million, with debt to total capital of about 17.2%.
SLB (SLB - Free Report) , the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported first-quarter 2024 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure, however, was above our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.