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Hess Corp (HES) Incurs Narrower-Than-Expected Loss in Q3
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Hess Corporation (HES - Free Report) reported adjusted third-quarter 2016 loss from continuing operations of $1.12 per share, narrower than the Zacks Consensus Estimate of a loss of $1.27 owing to lower operating expenses.
However, the quarterly loss was substantially wider than the year-ago loss of $1.03, mainly due to a drop in oil and gas prices.
Revenues decreased to $1,196 million in the quarter from $1,689 million a year ago mainly due to lower drilling activities. However, the top line surpassed the Zacks Consensus Estimate of $1,134.7 million on the back of higher natural gas liquids production and prices.
Third-Quarter Operational Update
In the reported quarter, the Exploration and Production business incurred a loss of $234 million, wider than the year-earlier loss of $188 million.
Quarterly hydrocarbon production was 314 thousand barrels of oil equivalent per day, down 17.4% year over year. The decrease can be attributed to lower drilling activities along with planned and unplanned downtime.
Crude oil production was 190 thousand barrels per day against 244 thousand barrels per day in the year-ago quarter. Natural gas liquids production totaled 45 thousand barrels compared with 40 thousand barrels prior-year period. Natural gas output was 472 thousand cubic feet (Mcf) against 574 Mcf a year ago.
Worldwide crude oil realization per barrel of $41.50 (including the impact of hedging) decreased nearly 9% year over year. Worldwide natural gas prices plunged 20.4% year over year to $3.20 per Mcf. However, the average worldwide natural gas liquids selling price increased to $9.23 per barrel from $7.17 in the year-ago quarter.
Operating Expenses
Operating expenses during the third quarter came at $421 million, down more than 17% in the year-ago expenses of $508 million.
Financials
Quarterly net cash flow from operations was $332 million at the end of the quarter. Hess’ capital expenditures totaled $435 million, down 49% from $849 in the prior-year quarter.
As of Sep 30, 2016, the company had approximately $3,529 million in cash and $6,671 million in long-term debt. The debt-to-capitalization ratio at the end of the quarter was 26%.
Hess Corporation currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector include Helix Energy Solutions Group, Inc. (HLX - Free Report) , EQT Midstream Partners, LP and Ultra Petroleum Corp. . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Helix Energy posted an average positive earnings surprise of 56.42% over the last four quarters.
EQT Midstream is projected to witness year-over-year earnings growth of almost 14% for the current year.
Ultra Petroleum is likely to witness year-over-year earnings growth of 148.4% for the current year.
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Hess Corp (HES) Incurs Narrower-Than-Expected Loss in Q3
Hess Corporation (HES - Free Report) reported adjusted third-quarter 2016 loss from continuing operations of $1.12 per share, narrower than the Zacks Consensus Estimate of a loss of $1.27 owing to lower operating expenses.
However, the quarterly loss was substantially wider than the year-ago loss of $1.03, mainly due to a drop in oil and gas prices.
Revenues decreased to $1,196 million in the quarter from $1,689 million a year ago mainly due to lower drilling activities. However, the top line surpassed the Zacks Consensus Estimate of $1,134.7 million on the back of higher natural gas liquids production and prices.
Third-Quarter Operational Update
In the reported quarter, the Exploration and Production business incurred a loss of $234 million, wider than the year-earlier loss of $188 million.
Quarterly hydrocarbon production was 314 thousand barrels of oil equivalent per day, down 17.4% year over year. The decrease can be attributed to lower drilling activities along with planned and unplanned downtime.
Crude oil production was 190 thousand barrels per day against 244 thousand barrels per day in the year-ago quarter. Natural gas liquids production totaled 45 thousand barrels compared with 40 thousand barrels prior-year period. Natural gas output was 472 thousand cubic feet (Mcf) against 574 Mcf a year ago.
Worldwide crude oil realization per barrel of $41.50 (including the impact of hedging) decreased nearly 9% year over year. Worldwide natural gas prices plunged 20.4% year over year to $3.20 per Mcf. However, the average worldwide natural gas liquids selling price increased to $9.23 per barrel from $7.17 in the year-ago quarter.
Operating Expenses
Operating expenses during the third quarter came at $421 million, down more than 17% in the year-ago expenses of $508 million.
Financials
Quarterly net cash flow from operations was $332 million at the end of the quarter. Hess’ capital expenditures totaled $435 million, down 49% from $849 in the prior-year quarter.
As of Sep 30, 2016, the company had approximately $3,529 million in cash and $6,671 million in long-term debt. The debt-to-capitalization ratio at the end of the quarter was 26%.
HESS CORP Price, Consensus and EPS Surprise
HESS CORP Price, Consensus and EPS Surprise | HESS CORP Quote
Zacks Rank
Hess Corporation currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector include Helix Energy Solutions Group, Inc. (HLX - Free Report) , EQT Midstream Partners, LP and Ultra Petroleum Corp. . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Helix Energy posted an average positive earnings surprise of 56.42% over the last four quarters.
EQT Midstream is projected to witness year-over-year earnings growth of almost 14% for the current year.
Ultra Petroleum is likely to witness year-over-year earnings growth of 148.4% for the current year.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>