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EQT Corp's (EQT) Q3 Earnings and Revenues Beat Estimates
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EQT Corporation (EQT - Free Report) recently reported third-quarter 2018 adjusted earnings of 35 cents per share, which beat the Zacks Consensus Estimate of 33 cents and also improved from the prior-year level of 10 cents.
Surging profit level from the EQM Gathering segment primarily attributed to the strong third-quarter earnings, negated partially by operating expenses.
Total operating revenues jumped 75.7% year over year to $1,158.9 million. Also, the top line beat the Zacks Consensus Estimate of $1,111 million. Utica and Marcellus shales’ output development as well as higher sales volume of natural gas drove the top line.
Sales volume rose to 374,237 million cubic feet equivalent (MMcfe) of natural gas from the year-ago quarter’s 205,067 MMcfe. Average realized price of natural gas equivalents remained unchanged from the year-ago period’s $2.76 per thousand cubic feet.
Segment Details
EQT Production reported third-quarter operating revenues of $1,050 million, up 75.7% year over year. The upside was mainly driven by higher sales volume of natural gas. Operating loss was $121.7 million against an income of $12.2 million in the year-ago quarter, primarily due to increased operating expenses (more than doubled year over year).
In the EQM Gathering segment, operating revenues increased from $116.5 million in the third quarter of 2017 to $252.9 million in third-quarter 2018. Operating expenses rose to $75 million from $30.6 million in the year-ago period. Operating income jumped to $177.9 million in the quarter under review from $85.9 million in the year-ago quarter. The segment’s impressive results can be attributed to EQT Corp’s Utica and Marcellus shales’ output development. The results were also positively impacted by the acquisition of the company’s retained midstream assets, which was concluded in May.
In the EQM Transmission segment, operating revenues fell marginally to $89.4 million from $89.8 million in the year-ago period. Operating expenses in the segment were recorded at $30.7 million, $0.7 million higher than the year-ago period. Operating income was down to $58.7 million in the reported quarter from $59.8 million in the year-ago period, due to a rise in operating and maintenance costs.
Following the acquisition of Rice Energy (Nov 13, 2017), RMP Water, which became EQM Water following the midstream merger in Jul 23, 2018, was incorporated in EQT’s segments. The segment generated an operating loss of around $3.1 million.
Financials
The company’s adjusted operating cash flow was $560.3 million during the quarter, up from $215.7 million in the year-ago period. EQT Corp’s capital expenditure totaled around $1,095.6 million in the third quarter. This includes nearly $8 million spent on EQM Water.
Guidance
Production sales volume for the fourth quarter of 2018 is projected in the range of 365-385 billion cubic feet equivalent (Bcfe). For the full year of 2018, production sales volume is expected in the range of 1,460-1,480 Bcfe.
Total liquids volume is estimated at 3,600-3,800 thousand barrel of oil equivalent (MBbls) for the fourth quarter. For the full year, liquids volume is expected in the range of 16,730-17,330 MBbls.
Adjusted operating cash flow for 2018 is expected in the range of $2,250-$2,350 million.
Share Repurchase
EQT Corp bought back 9,946,382 shares in the third quarter at $50.29 per share, marking the completion of its $500 million share buyback program.
Other News
The company expects the 303-mile Mountain Valley Pipeline to come online in the fourth-quarter of 2019, following some modifications of its construction schedule. The pipeline has a cost tag of $4.6 billion.
EQT Corp divested its non-core Huron assets of Southern Appalachia for $575 million in cash, to Diversified Gas and Oil PLC. The company still holds the deep drilling rights in the properties.
EQT Corp recently received approval for the spin-off of Equitrans Midstream Corporation from the board of directors. The company is formed with the objective of owning the midstream business of EQT Corp, once the separation of upstream and midstream businesses takes place. The company will have ETRN as its ticker and start trading in NYSE from Nov 13.
Zacks Rank & Key Picks
Currently, EQT Corp has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks given below:
Brazilian state-run Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) has a Zacks Rank #2 (Buy). The company’s earnings for 2018 are expected to surge more than 100% from the 2017 level.
Woodlands, TX-based Anadarko Petroleum Corporation holds a Zacks Rank #2. The company’s earnings for 2018 are expected to surge more than 250% year over year.
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EQT Corp's (EQT) Q3 Earnings and Revenues Beat Estimates
EQT Corporation (EQT - Free Report) recently reported third-quarter 2018 adjusted earnings of 35 cents per share, which beat the Zacks Consensus Estimate of 33 cents and also improved from the prior-year level of 10 cents.
Surging profit level from the EQM Gathering segment primarily attributed to the strong third-quarter earnings, negated partially by operating expenses.
Total operating revenues jumped 75.7% year over year to $1,158.9 million. Also, the top line beat the Zacks Consensus Estimate of $1,111 million. Utica and Marcellus shales’ output development as well as higher sales volume of natural gas drove the top line.
EQT Corporation Price, Consensus and EPS Surprise
EQT Corporation Price, Consensus and EPS Surprise | EQT Corporation Quote
Production and Price Realization
Sales volume rose to 374,237 million cubic feet equivalent (MMcfe) of natural gas from the year-ago quarter’s 205,067 MMcfe. Average realized price of natural gas equivalents remained unchanged from the year-ago period’s $2.76 per thousand cubic feet.
Segment Details
EQT Production reported third-quarter operating revenues of $1,050 million, up 75.7% year over year. The upside was mainly driven by higher sales volume of natural gas. Operating loss was $121.7 million against an income of $12.2 million in the year-ago quarter, primarily due to increased operating expenses (more than doubled year over year).
In the EQM Gathering segment, operating revenues increased from $116.5 million in the third quarter of 2017 to $252.9 million in third-quarter 2018. Operating expenses rose to $75 million from $30.6 million in the year-ago period. Operating income jumped to $177.9 million in the quarter under review from $85.9 million in the year-ago quarter. The segment’s impressive results can be attributed to EQT Corp’s Utica and Marcellus shales’ output development. The results were also positively impacted by the acquisition of the company’s retained midstream assets, which was concluded in May.
In the EQM Transmission segment, operating revenues fell marginally to $89.4 million from $89.8 million in the year-ago period. Operating expenses in the segment were recorded at $30.7 million, $0.7 million higher than the year-ago period. Operating income was down to $58.7 million in the reported quarter from $59.8 million in the year-ago period, due to a rise in operating and maintenance costs.
Following the acquisition of Rice Energy (Nov 13, 2017), RMP Water, which became EQM Water following the midstream merger in Jul 23, 2018, was incorporated in EQT’s segments. The segment generated an operating loss of around $3.1 million.
Financials
The company’s adjusted operating cash flow was $560.3 million during the quarter, up from $215.7 million in the year-ago period. EQT Corp’s capital expenditure totaled around $1,095.6 million in the third quarter. This includes nearly $8 million spent on EQM Water.
Guidance
Production sales volume for the fourth quarter of 2018 is projected in the range of 365-385 billion cubic feet equivalent (Bcfe). For the full year of 2018, production sales volume is expected in the range of 1,460-1,480 Bcfe.
Total liquids volume is estimated at 3,600-3,800 thousand barrel of oil equivalent (MBbls) for the fourth quarter. For the full year, liquids volume is expected in the range of 16,730-17,330 MBbls.
Adjusted operating cash flow for 2018 is expected in the range of $2,250-$2,350 million.
Share Repurchase
EQT Corp bought back 9,946,382 shares in the third quarter at $50.29 per share, marking the completion of its $500 million share buyback program.
Other News
The company expects the 303-mile Mountain Valley Pipeline to come online in the fourth-quarter of 2019, following some modifications of its construction schedule. The pipeline has a cost tag of $4.6 billion.
EQT Corp divested its non-core Huron assets of Southern Appalachia for $575 million in cash, to Diversified Gas and Oil PLC. The company still holds the deep drilling rights in the properties.
EQT Corp recently received approval for the spin-off of Equitrans Midstream Corporation from the board of directors. The company is formed with the objective of owning the midstream business of EQT Corp, once the separation of upstream and midstream businesses takes place. The company will have ETRN as its ticker and start trading in NYSE from Nov 13.
Zacks Rank & Key Picks
Currently, EQT Corp has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks given below:
El Dorado, AR-based Murphy Oil Corporation (MUR - Free Report) carries a Zacks Rank #1 (Strong Buy). The company’s sales for 2018 are expected to grow more than 20% from 2017. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brazilian state-run Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) has a Zacks Rank #2 (Buy). The company’s earnings for 2018 are expected to surge more than 100% from the 2017 level.
Woodlands, TX-based Anadarko Petroleum Corporation holds a Zacks Rank #2. The company’s earnings for 2018 are expected to surge more than 250% year over year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>