A month has gone by since the last earnings report for Cimarex Energy Co. . Shares have lost about 9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fourth-Quarter 2016 Results
Cimarex Energy reported fourth-quarter 2016 earnings of $0.60 per share that beat than the Zacks Consensus Estimate of $0.59. In the fourth quarter of 2015, the company had incurred a loss of $0.25 per share. The improvement is mainly attributable to increase in price realizations.
Total Revenues
In the fourth quarter, Cimarex Energy’s total revenue of $382.2 million surpassed the Zacks Consensus Estimate of $372 million. The reported revenues also increased from $311.3 million a year ago.
Operational Highlights
In the quarter under review, total production averaged 959.7 million cubic feet equivalent (MMcfe) per day, down 2.6% year over year. Oil volumes dipped 3.3% year over year to 45.6 thousand barrels per day (MBbls/d) and natural gas volumes fell 3.8% to 457.2 MMcf, whereas natural gas liquids (NGL) volumes inched up 0.6% to 38.2 MBbls/d.
Year-over-year realized prices for natural gas, crude oil and NGL increased 30%, 19.7%, and 42.7% to $2.86 per thousand cubic feet, $44.67 per barrel and $18.15 per barrel, respectively, in the reported quarter.
The company brought 55 gross (25 net) wells onstream during the quarter. As of Dec 31, 2016, a total of 153 gross (61 net) wells were awaiting completion.
Financial Condition
Cimarex Energy had cash and cash equivalents of $652.9 million as of Dec 31, 2016 compared with $779.4 million as of Dec 31, 2015. Long-term debt was $1.5 billion as of Dec 31, 2016, which represents a debt-to-capitalization ratio of 38.7%.
Cimarex Energy's net cash from operating activities during the quarter was $170.0 million compared with $115.0 million in the prior-year period. The company invested $735 million for exploration and development during 2016, which was primarily funded with cash flow from operations and cash in hand.
Reserves Replacement
At the end of 2016, oil and gas proved reserves were 2.9 trillion cubic feet equivalent (Tcfe), almost flat with the prior year. In 2016, the company added 450.2 billion cubic feet equivalent (Bcfe) resulting in reserve replacement of 128% of the 2016 production. Proved developed reserves increased 5% to 2.3 Tcfe.
Guidance
Total production for the first quarter of 2017 is projected to average 1.01–1.05 Bcfe per day. In the first quarter, oil and gas productions are expected to increase by 10% and 4–5%, respectively, on a sequential basis. Full-year 2017 production is estimated to average 1.06–1.11 Bcfe per day, up 13% from the midpoint of the 2016 level. Oil production is expected to increase 22–27% on an annual basis. Capital investment for exploration and development is estimated at $1.1–$1.2 billion for 2017, up 56% from the midpoint of the 2016 level.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. There have been eight upward revisions for the current quarter compared to seven downward. While looking back at additional 30 days, we can see even more upward momentum. There have been thirteen upward moves compared to six downward two months ago.
VGM Scores
At this time, Cimarex Energy's stock has a nice Growth Score of 'B', however its Momentum is doing a bit better with an 'A'. However, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile 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.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
Estimates have been broadly trending upward for the stock. The magnitude of these revisions also looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Cimarex Energy (XEC) Down 9% Since the Last Earnings Report?
A month has gone by since the last earnings report for Cimarex Energy Co. . Shares have lost about 9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fourth-Quarter 2016 Results
Cimarex Energy reported fourth-quarter 2016 earnings of $0.60 per share that beat than the Zacks Consensus Estimate of $0.59. In the fourth quarter of 2015, the company had incurred a loss of $0.25 per share. The improvement is mainly attributable to increase in price realizations.
Total Revenues
In the fourth quarter, Cimarex Energy’s total revenue of $382.2 million surpassed the Zacks Consensus Estimate of $372 million. The reported revenues also increased from $311.3 million a year ago.
Operational Highlights
In the quarter under review, total production averaged 959.7 million cubic feet equivalent (MMcfe) per day, down 2.6% year over year. Oil volumes dipped 3.3% year over year to 45.6 thousand barrels per day (MBbls/d) and natural gas volumes fell 3.8% to 457.2 MMcf, whereas natural gas liquids (NGL) volumes inched up 0.6% to 38.2 MBbls/d.
Year-over-year realized prices for natural gas, crude oil and NGL increased 30%, 19.7%, and 42.7% to $2.86 per thousand cubic feet, $44.67 per barrel and $18.15 per barrel, respectively, in the reported quarter.
The company brought 55 gross (25 net) wells onstream during the quarter. As of Dec 31, 2016, a total of 153 gross (61 net) wells were awaiting completion.
Financial Condition
Cimarex Energy had cash and cash equivalents of $652.9 million as of Dec 31, 2016 compared with $779.4 million as of Dec 31, 2015. Long-term debt was $1.5 billion as of Dec 31, 2016, which represents a debt-to-capitalization ratio of 38.7%.
Cimarex Energy's net cash from operating activities during the quarter was $170.0 million compared with $115.0 million in the prior-year period. The company invested $735 million for exploration and development during 2016, which was primarily funded with cash flow from operations and cash in hand.
Reserves Replacement
At the end of 2016, oil and gas proved reserves were 2.9 trillion cubic feet equivalent (Tcfe), almost flat with the prior year. In 2016, the company added 450.2 billion cubic feet equivalent (Bcfe) resulting in reserve replacement of 128% of the 2016 production. Proved developed reserves increased 5% to 2.3 Tcfe.
Guidance
Total production for the first quarter of 2017 is projected to average 1.01–1.05 Bcfe per day. In the first quarter, oil and gas productions are expected to increase by 10% and 4–5%, respectively, on a sequential basis. Full-year 2017 production is estimated to average 1.06–1.11 Bcfe per day, up 13% from the midpoint of the 2016 level. Oil production is expected to increase 22–27% on an annual basis. Capital investment for exploration and development is estimated at $1.1–$1.2 billion for 2017, up 56% from the midpoint of the 2016 level.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. There have been eight upward revisions for the current quarter compared to seven downward. While looking back at additional 30 days, we can see even more upward momentum. There have been thirteen upward moves compared to six downward two months ago.
Cimarex Energy Co Price and Consensus
Cimarex Energy Co Price and Consensus | Cimarex Energy Co Quote
VGM Scores
At this time, Cimarex Energy's stock has a nice Growth Score of 'B', however its Momentum is doing a bit better with an 'A'. However, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile 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.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
Estimates have been broadly trending upward for the stock. The magnitude of these revisions also looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.