It has been about a month since the last earnings report for Denbury Resources . Shares have added about 8.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Denbury Resources due for a pullback? 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.
Denbury Q4 Earnings Beats Estimates, Falls Y/Y
Denbury Resources Inc. delivered earnings of 10 cents per share in fourth-quarter 2018 (excluding one-time items), which beat the Zacks Consensus Estimate of 9 cents. However, the figure declined from the year-ago quarter’s figure of12 cents.
In 2018, adjusted profit was 48 cents per share compared with 14 cents a year ago. The figure surpassed the Zacks Consensus Estimate of 47 cents.
Higher oil and gas price realizations as well as lower expenses contributed to growth, which was offset by lower production.
In fourth-quarter 2018, total revenues were $338.4 million, up from $326.6 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $328 million.
Total revenues in 2018 rose 30.4% year over year to $1,473.6 million. The figure surpassed the Zacks Consensus Estimate of $1,460.0 million.
Operational Performance
During the quarter, production averaged 59,867 barrels of oil equivalent per day (Boe/d) compared with 61,144 Boe/d in the prior-year quarter.
Oil production averaged 58,266 barrels per day (97.3% of the total volume), down 1.4% from the year-ago quarter’s level. Natural gas production fell 22.2% and averaged 9,603 thousand cubic feet (Mcf) on a daily basis.
The company’s production from tertiary operations averaged 37,764 barrels of oil equivalent per day, down 3.2% year over year.
Oil price realization (including the impact of hedges) averaged $55.75 per barrel in the quarter, up 0.5% year over year. Gas prices surged 40.4% year over year to $3.44 per Mcf. On an oil equivalent basis, the overall price realization was $54.81 per barrel, up 1.3% from the year-earlier quarter’s level of $54.11 per barrel.
Total Expenses
During the quarter, total expenses were $115.7 million, down 65.3% year over year.
Financials
Cash flow from operations was $136.2 million, up from $124.3 million in the year-ago quarter. Oil and natural gas capital investments were approximately $101.1 million compared with $58.2 million in the year-ago quarter. As of Dec 31, 2018, cash balance was $38.6 million and total debt was $2.5 billion.
Reserves
As of Dec 31, 2018, total proved reserves were 262 million Boe (MMBoe), up from 260 MMBoe as on Dec 31, 2017. Of the total reserves, 97% was liquids and 88% was proved developed. The company replaced 111% of 2018 production.
Guidance
Denbury — a predominant oil exploration and production company — expects 2019 production in the range of 56,000-60,000 barrels of oil equivalent per day (BOE/d). The mid-point of this range is likely to be almost flat with the company’s 2018 exit rate of 59,867 BOE/d. Capital expenditure is estimated in the range of $240-$260 million, down 20-25% from the 2018 capital spending level.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.25% due to these changes.
VGM Scores
Currently, Denbury Resources has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Denbury Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Denbury Resources (DNR) Up 8.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Denbury Resources . Shares have added about 8.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Denbury Resources due for a pullback? 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.
Denbury Q4 Earnings Beats Estimates, Falls Y/Y
Denbury Resources Inc. delivered earnings of 10 cents per share in fourth-quarter 2018 (excluding one-time items), which beat the Zacks Consensus Estimate of 9 cents. However, the figure declined from the year-ago quarter’s figure of12 cents.
In 2018, adjusted profit was 48 cents per share compared with 14 cents a year ago. The figure surpassed the Zacks Consensus Estimate of 47 cents.
Higher oil and gas price realizations as well as lower expenses contributed to growth, which was offset by lower production.
In fourth-quarter 2018, total revenues were $338.4 million, up from $326.6 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $328 million.
Total revenues in 2018 rose 30.4% year over year to $1,473.6 million. The figure surpassed the Zacks Consensus Estimate of $1,460.0 million.
Operational Performance
During the quarter, production averaged 59,867 barrels of oil equivalent per day (Boe/d) compared with 61,144 Boe/d in the prior-year quarter.
Oil production averaged 58,266 barrels per day (97.3% of the total volume), down 1.4% from the year-ago quarter’s level. Natural gas production fell 22.2% and averaged 9,603 thousand cubic feet (Mcf) on a daily basis.
The company’s production from tertiary operations averaged 37,764 barrels of oil equivalent per day, down 3.2% year over year.
Oil price realization (including the impact of hedges) averaged $55.75 per barrel in the quarter, up 0.5% year over year. Gas prices surged 40.4% year over year to $3.44 per Mcf. On an oil equivalent basis, the overall price realization was $54.81 per barrel, up 1.3% from the year-earlier quarter’s level of $54.11 per barrel.
Total Expenses
During the quarter, total expenses were $115.7 million, down 65.3% year over year.
Financials
Cash flow from operations was $136.2 million, up from $124.3 million in the year-ago quarter. Oil and natural gas capital investments were approximately $101.1 million compared with $58.2 million in the year-ago quarter. As of Dec 31, 2018, cash balance was $38.6 million and total debt was $2.5 billion.
Reserves
As of Dec 31, 2018, total proved reserves were 262 million Boe (MMBoe), up from 260 MMBoe as on Dec 31, 2017. Of the total reserves, 97% was liquids and 88% was proved developed. The company replaced 111% of 2018 production.
Guidance
Denbury — a predominant oil exploration and production company — expects 2019 production in the range of 56,000-60,000 barrels of oil equivalent per day (BOE/d). The mid-point of this range is likely to be almost flat with the company’s 2018 exit rate of 59,867 BOE/d. Capital expenditure is estimated in the range of $240-$260 million, down 20-25% from the 2018 capital spending level.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.25% due to these changes.
VGM Scores
Currently, Denbury Resources has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Denbury Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.