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QEP Resources (QEP) Posts Lower-than-Excepted Loss in Q3
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Domestic energy explorer, QEP Resources Inc. reported narrower-than-expected loss for third-quarter 2016. Higher production, especially from the Williston, Haynesville/Cotton Valley and Permian Basins, aided the results. The improvement in the quarterly result was, however, partially dampened by lower price realizations.
The company reported loss per share – excluding special items – of 21 cents, narrower than the Zacks Consensus Estimate of a loss of 23 cents. Notably, the company had reported adjusted earnings of 1 cent per share in the year-ago quarter.
Quarterly revenues of $382.4 million decreased approximately 24.7% from third-quarter 2015. The top line, however, came in above the Zacks Consensus Estimate of $360 million.
Volume Analysis
QEP Resources’ overall production during the third quarter dipped 0.1% year over year to 86.6 billion cubic feet equivalent (Bcfe). A decrease in production from the Pinedale and the Uinta Basin resulted in the downside.
Natural gas volumes declined 3% year over year to 46.8 Bcf, whereas liquid volumes improved significantly to 6,641.6.8 thousand barrels.
Realized Prices
QEP Resources’ average realized natural gas price in the quarter was $2.64 per thousand cubic feet, down 17% from the year-ago quarter price of $3.17. Moreover, average oil price realization decreased nearly 26% to $43.93 per barrel.
Overall net realized equivalent price averaged $4.20 per thousand cubic feet equivalent in the quarter, down 24% year over year.
Operating Expense
Total operating expenses for the quarter decreased to $481.3 million from $608.2 million a year ago.
Balance Sheet
As of Sep 30, 2016, QEP Resources had cash and cash equivalents of $1,032.2 million. The company’s long-term debt (including current portion) was $2,019.3 million, which represents a debt-to-capitalization ratio of 35.7%.
Guidance
QEP Resources slightly increased its 2016 production guidance to 337 Bcfe.
The projection for 2016 capital spending was increased to $525–$550 million from $500−$550 million.
Zacks Rank & Stocks to Consider
Currently, QEP Resources sports a Zacks Rank #1 (Strong Buy).
In the last four quarters, Enviva Partners posted an average positive earnings surprise of 0.19%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
In the last four quarters, W&T Offshore posted an average positive earnings surprise of 23.63%.
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QEP Resources (QEP) Posts Lower-than-Excepted Loss in Q3
Domestic energy explorer, QEP Resources Inc. reported narrower-than-expected loss for third-quarter 2016. Higher production, especially from the Williston, Haynesville/Cotton Valley and Permian Basins, aided the results. The improvement in the quarterly result was, however, partially dampened by lower price realizations.
The company reported loss per share – excluding special items – of 21 cents, narrower than the Zacks Consensus Estimate of a loss of 23 cents. Notably, the company had reported adjusted earnings of 1 cent per share in the year-ago quarter.
Quarterly revenues of $382.4 million decreased approximately 24.7% from third-quarter 2015. The top line, however, came in above the Zacks Consensus Estimate of $360 million.
Volume Analysis
QEP Resources’ overall production during the third quarter dipped 0.1% year over year to 86.6 billion cubic feet equivalent (Bcfe). A decrease in production from the Pinedale and the Uinta Basin resulted in the downside.
QEP RESOURCES Price, Consensus and EPS Surprise
QEP RESOURCES Price, Consensus and EPS Surprise | QEP RESOURCES Quote
Natural gas volumes declined 3% year over year to 46.8 Bcf, whereas liquid volumes improved significantly to 6,641.6.8 thousand barrels.
Realized Prices
QEP Resources’ average realized natural gas price in the quarter was $2.64 per thousand cubic feet, down 17% from the year-ago quarter price of $3.17. Moreover, average oil price realization decreased nearly 26% to $43.93 per barrel.
Overall net realized equivalent price averaged $4.20 per thousand cubic feet equivalent in the quarter, down 24% year over year.
Operating Expense
Total operating expenses for the quarter decreased to $481.3 million from $608.2 million a year ago.
Balance Sheet
As of Sep 30, 2016, QEP Resources had cash and cash equivalents of $1,032.2 million. The company’s long-term debt (including current portion) was $2,019.3 million, which represents a debt-to-capitalization ratio of 35.7%.
Guidance
QEP Resources slightly increased its 2016 production guidance to 337 Bcfe.
The projection for 2016 capital spending was increased to $525–$550 million from $500−$550 million.
Zacks Rank & Stocks to Consider
Currently, QEP Resources sports a Zacks Rank #1 (Strong Buy).
Other well-ranked players from the broader energy sector include Enviva Partners, LP (EVA - Free Report) , Ultra Petroleum Corp. and W&T Offshore Inc. (WTI - Free Report) . All these stocks sport the same Zacks Rank QEP Resources. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Enviva Partners posted an average positive earnings surprise of 0.19%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
In the last four quarters, W&T Offshore posted an average positive earnings surprise of 23.63%.
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>>