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Concho Resources (CXO) Tops Q3 Earnings & Sales Estimates

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Permian-focused energy explorer Concho Resources Inc.  reported strong third-quarter revenues and earnings results on the back of higher commodity price realizations and robust production growth.

The company reported adjusted net earnings per share of 45 cents, comfortably beating the Zacks Consensus Estimate of 26 cents. The bottom line also improved from the prior-year quarter adjusted income of 32 cents per share.

Concho Resources’ total operating revenues for the third quarter amounted to $627 million, which increased substantially from $430 million a year ago. The top line further surpassed the Zacks Consensus Estimate of $617 million.

Concho Resources Inc. Price, Consensus and EPS Surprise

 

Concho Resources Inc. Price, Consensus and EPS Surprise | Concho Resources Inc. Quote

Volume Analysis

Concho Resources' average quarterly volume increased 26% year over year to 193.2 thousand barrels of oil equivalent per day (exceeding the high end of the company’s guidance range), of which 62% was liquids. Daily oil output was up 31% to 119.6 thousand barrels, while natural gas production came in at 441.6 million cubic feet (up 19%).

Realized Prices

The average realized natural gas price jumped 31% from the year-ago quarter to $3.18 per thousand cubic feet, while average oil price realization increased 9.1% to $45.29 per barrel. Overall, the company fetched $35.29 per barrel as against $30.61 a year back.

Financial Position

As of Sep 30, Concho Resources had long-term debt of $2,738 million, representing a debt-to-capitalization ratio of 24.1%.

Guidance

The company expects production growth above the high end of its annual guidance range of 24-26%, with oil output growth expected to exceed 27%. The company has provided fourth quarter net production guidance of 200-204 thousand barrels of oil equivalent per day. Capital expenditures for 2017 are estimated to be between $1,600 million and $1,800 million.

Zacks Rank

Concho Resources is an independent exploration and production company dealing with the exploration and development of oil and natural gas properties. The operations of the company are mainly concentrated in the Permian Basin of Southeast New Mexico and West Texas.

Apart from Concho Resources, other key players in the Permian Basin are Apache Corporation (APA - Free Report) , as well as biggies like ExxonMobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) .

Concho Resources carries a Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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