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Why Is Range Resources (RRC) Down 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 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 drivers.
First-Quarter 2017 Results
Range Resources reported better-than-expected first-quarter 2017 earnings. The bottom-line improvement was mainly driven by increased production and higher price realizations, partially offset by higher expenses.
The company’s adjusted profit of $0.69 a share comfortably surpassed the Zacks Consensus Estimate of earnings of $0.18. Notably, the company had incurred a loss of $0.22 per share in the year-ago quarter.
Total revenue of $776.7 million beat the Zacks Consensus Estimate of $570.9 million and also jumped 134.3% year over year from $331.4 million.
Operational Performance
The company’s first-quarter production averaged almost 1,931.9 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 40% from the year-earlier quarter due to the company’s highly successful drilling program.
On a year-over-year basis, oil production increased 28%, while NGL production rose 44%. Moreover, natural gas production jumped 39% year over year.
The company’s total price realization (including the effects of hedges and derivative settlements) averaged $2.17 per Mcfe, up 41% year over year. Of this, NGL prices surged 68% to $8.00 per barrel while crude oil prices rose 39% to $49.50 per barrel, both on a year-over-year basis. Natural gas prices were up 38% year over year to $2.21 per Mcf.
Expenses
Total first-quarter 2017 expense was $494.1 million, up 6% year over year.
At the end of the quarter, the company had long-term debt of approximately $3,738.8 million with a debt-to-capitalization ratio of 40.1%. The company incurred drilling expenditures of $228 million in the first quarter to drill 54 wells.
Guidance
For the second quarter of 2017, the company estimates production of 1.93 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. This translates to annual growth rate of 33–35%.
The company’s 2017 capital budget is set at $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?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted by -212 % due to these changes.
At this time, the stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% 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.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Range Resources (RRC) Down 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 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 drivers.
First-Quarter 2017 Results
Range Resources reported better-than-expected first-quarter 2017 earnings. The bottom-line improvement was mainly driven by increased production and higher price realizations, partially offset by higher expenses.
The company’s adjusted profit of $0.69 a share comfortably surpassed the Zacks Consensus Estimate of earnings of $0.18. Notably, the company had incurred a loss of $0.22 per share in the year-ago quarter.
Total revenue of $776.7 million beat the Zacks Consensus Estimate of $570.9 million and also jumped 134.3% year over year from $331.4 million.
Operational Performance
The company’s first-quarter production averaged almost 1,931.9 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 40% from the year-earlier quarter due to the company’s highly successful drilling program.
On a year-over-year basis, oil production increased 28%, while NGL production rose 44%. Moreover, natural gas production jumped 39% year over year.
The company’s total price realization (including the effects of hedges and derivative settlements) averaged $2.17 per Mcfe, up 41% year over year. Of this, NGL prices surged 68% to $8.00 per barrel while crude oil prices rose 39% to $49.50 per barrel, both on a year-over-year basis. Natural gas prices were up 38% year over year to $2.21 per Mcf.
Expenses
Total first-quarter 2017 expense was $494.1 million, up 6% year over year.
At the end of the quarter, the company had long-term debt of approximately $3,738.8 million with a debt-to-capitalization ratio of 40.1%. The company incurred drilling expenditures of $228 million in the first quarter to drill 54 wells.
Guidance
For the second quarter of 2017, the company estimates production of 1.93 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. This translates to annual growth rate of 33–35%.
The company’s 2017 capital budget is set at $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?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted by -212 % 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, the stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% 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.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.