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Why Is Range Resources (RRC) Down 5.9% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Range Resources Corporation (RRC - Free Report) . Shares have lost about 5.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2016 Results
Range Resources reported quarterly loss of $0.66 a share against the Zacks Consensus Estimate of earnings of $0.08. Lower oil and gas prices realizations led to the underperformances. This was partially offset by reduced expenses and increased production. However, the bottom-line came narrower than the year-ago quarter loss of $1.93 per share.
Total revenue of $253.5 million missed the Zacks Consensus Estimate of $532 million and also declined 38% year over year from $410.7 million.
Operational Performance
The company’s fourth-quarter production averaged almost 1,854.2 million cubic feet equivalent per day (MMcfe/d). Natural gas made up for 67% of the total production, while natural gas liquids (NGLs) and oil accounted for the remaining 33%. Total production volume improved 29% from the year-earlier quarter due to the company’s highly successful drilling program.
On a year-over-year basis, oil production increased 23%, while NGL rose 68%. Moreover, natural gas production increased 18% year over year.
The company’s total price realization (including the effects of hedges and derivative settlements) averaged $2.23 per Mcfe, down 6% year over year. Of this, NGL prices surged 43% to $11.20 per barrel, whereas crude oil prices plunged 23% to $61.30 per barrel and natural gas prices were down 8% to $1.93 per Mcf, all on a year-over-year basis.
Expenses
Total fourth-quarter 2016 expense was $509.8 million, down 43% year over year.
Financials
At the end of the quarter, the company had long-term debt of approximately $3,773.5 million with a debt-to-capitalization ratio of 41.1%. The company incurred drilling expenditures of $195 million in the fourth quarter to drill 22 wells.
Reserves
As of Dec 31, 2016, Range Resources had total proved reserves of 12,072 billion cubic feet equivalent (Bcfe), significantly higher than 9,892 Bcfe at the end of Dec 31, 2015.
Guidance
For the first quarter of 2017, the company estimates production of 1.92 billion cubic feet equivalent (Bcfe) per day, with liquid comprising 30–32%.
For 2017, the company has set its production guidance at 2.07 Bcfe per day, which equates to an annual growth rate of 33–35%.
The company also projects 2017 capital budget to be $1.15 billion. It is to be noted that almost 67% of the budget will be allocated for the Marcellus region, while the remaining will be spent for North Louisiana.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one upward revision for the current quarter compared to one downward. In the past month, the consensus estimate also shifted downward by 35.5% due to these changes.
At this time, Range Resources' stock has an average Growth score of 'C', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our styles scores, the stock is suitable for growth and momentum investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We are looking for inline return from the stock in the next few months.
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Why Is Range Resources (RRC) Down 5.9% Since the Last Earnings Report?
It has been about a month since the last earnings report for Range Resources Corporation (RRC - Free Report) . Shares have lost about 5.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2016 Results
Range Resources reported quarterly loss of $0.66 a share against the Zacks Consensus Estimate of earnings of $0.08. Lower oil and gas prices realizations led to the underperformances. This was partially offset by reduced expenses and increased production. However, the bottom-line came narrower than the year-ago quarter loss of $1.93 per share.
Total revenue of $253.5 million missed the Zacks Consensus Estimate of $532 million and also declined 38% year over year from $410.7 million.
Operational Performance
The company’s fourth-quarter production averaged almost 1,854.2 million cubic feet equivalent per day (MMcfe/d). Natural gas made up for 67% of the total production, while natural gas liquids (NGLs) and oil accounted for the remaining 33%. Total production volume improved 29% from the year-earlier quarter due to the company’s highly successful drilling program.
On a year-over-year basis, oil production increased 23%, while NGL rose 68%. Moreover, natural gas production increased 18% year over year.
The company’s total price realization (including the effects of hedges and derivative settlements) averaged $2.23 per Mcfe, down 6% year over year. Of this, NGL prices surged 43% to $11.20 per barrel, whereas crude oil prices plunged 23% to $61.30 per barrel and natural gas prices were down 8% to $1.93 per Mcf, all on a year-over-year basis.
Expenses
Total fourth-quarter 2016 expense was $509.8 million, down 43% year over year.
Financials
At the end of the quarter, the company had long-term debt of approximately $3,773.5 million with a debt-to-capitalization ratio of 41.1%. The company incurred drilling expenditures of $195 million in the fourth quarter to drill 22 wells.
Reserves
As of Dec 31, 2016, Range Resources had total proved reserves of 12,072 billion cubic feet equivalent (Bcfe), significantly higher than 9,892 Bcfe at the end of Dec 31, 2015.
Guidance
For the first quarter of 2017, the company estimates production of 1.92 billion cubic feet equivalent (Bcfe) per day, with liquid comprising 30–32%.
For 2017, the company has set its production guidance at 2.07 Bcfe per day, which equates to an annual growth rate of 33–35%.
The company also projects 2017 capital budget to be $1.15 billion. It is to be noted that almost 67% of the budget will be allocated for the Marcellus region, while the remaining will be spent for North Louisiana.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one upward revision for the current quarter compared to one downward. In the past month, the consensus estimate also shifted downward by 35.5% due to these changes.
Range Resources Corporation Price and Consensus
Range Resources Corporation Price and Consensus | Range Resources Corporation Quote
VGM Scores
At this time, Range Resources' stock has an average Growth score of 'C', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our styles scores, the stock is suitable for growth and momentum investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We are looking for inline return from the stock in the next few months.