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Pioneer Natural Resources (PXD) Up 19% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Pioneer Natural Resources (PXD - Free Report) . Shares have added about 19% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Pioneer Natural 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.

Pioneer Natural Q1 Earnings Top Estimates, Fall Y/Y

Pioneer Natural Resources Company reported first-quarter 2020 earnings per share of $1.15, excluding one-time items, beating the Zacks Consensus Estimate of $1.03. However, the bottom line declined from the year-ago quarter’s $1.83.

Revenues and other income declined 6.5% year over year to $2,257 million from $2,413 million a year ago. Also, the top line missed the consensus mark of $2,298 million.

The company reported better-than-expected earnings, thanks to higher oil equivalent production volumes. This offset partially offset by lower realized prices of commodities.

Share Buyback

During the March quarter of 2020, the explorer bought back $110 million of shares as part of its $2-billion repurchase program. As of May 6, the upstream firm repurchased $859 million worth of shares under its authorized buyback plan.

Production

Total production in the reported quarter was 375.2 thousand barrels of oil equivalent per day (MBOE/D), up 12.5% year over year. The upstream energy added that the production number came in at the top end of its guidance.

Oil production was 222.7 thousand barrels per day (MBbl/D), up 8% year over year. Natural gas liquids (NGLs) production of 84.4 MBbl/D compared with the year-ago quarter’s 67.1 MBbl/D. Moreover, natural gas production amounted to 408.9 million cubic feet per day (MMcf/D), up from the year-ago quarter’s 360.6 MMcf/D.

Price Realization

On an oil-equivalent basis, average realized price was $32.08 per barrel in the reported quarter compared with $37.84 a year ago. The company reported average realized crude price of $45.60 a barrel, down from $49.38 in the March-end quarter of 2019.  

Average natural gas price dropped 35.6% year over year to $1.61 per thousand cubic feet (Mcf). Moreover, natural gas liquids were sold at $14.52 a barrel, down from $22.79 a year ago.

Cash, Debt and Capex

At the end of the quarter under review, cash balance totaled $784 million. Long-term debt summed $2,140 million, reflecting a debt-to-capitalization of 17.8%.

During the March-end quarter, the company spent $620 million.

Guidance

The company has revised its 2020 capital budget to the band of $1.4 billion to $1.6 billion, representing a decline of roughly 55% from its initial spending budget.

For 2020, Pioneer Natural’s revised oil equivalent production volumes guidance is pegged at 341 MBoE/D to 359 MBoE/D. The company’s revised oil production volumes range for 2020 is 198 to 208 MBbl/D.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month. The consensus estimate has shifted 35.28% due to these changes.

VGM Scores

Currently, Pioneer Natural Resources has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Pioneer Natural 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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