It has been about a month since the last earnings report for Centennial Resource . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Centennial Resource 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 catalysts.
Centennial Misses on Q1 Earnings Estimates
Centennial Resource’s first-quarter adjusted earnings of 37 cents per share missed the Zacks Consensus Estimate of 40 cents. The bottom line, however, improved from the year-ago loss of 1 cent per share.
Quarterly revenues of $347 million increased from $192 million in the year-ago quarter and beat the Zacks Consensus Estimate of $307 million.
The lower-than-expected quarterly earnings of Centennial Resource were owing to increased lease operating expenses and exploration and other expenses. This was offset partially by higher oil equivalent volumes and commodity prices.
Operations:
Production
Centennial Resource’s overall production of 61,359 barrels of oil equivalent per day (Boe/d) increased from the year-ago period’s 54,202 Boe/d. Of the total output, 53.4% comprised crude oil.
Oil volumes increased from 28,239 Bbls/d to 32,741 barrels per day (Bbls/d) in the March quarter. Natural gas liquids (NGLs) production totaled 10,238 Bbls/d, up from the year-ago quarter’s 8,662 Bbls/d. Natural gas production of 110,280 thousand cubic feet per day (Mcf/d) increased from 103,806 Mcf/d.
Price Realizations
Average realized crude price (excluding the effects of derivative settlements) of Centennial Resource was reported at $89.17 a barrel, up from $52.62 in first-quarter 2021. The same for natural gas rose to $3.93 per Mcf from the prior year’s $3.79. Furthermore, NGLs price rose to $49.37 per barrel in the first quarter from $29.78.
Operating Costs
Centennial Resource’s total operating costs were $182.2 million in first-quarter 2022, higher than $158.4 million in the year-ago period due to increased lease operating expenses and exploration and other expenses.
On a per Boe basis, the company’s first-quarter lease operating expenses were $5.20, lower than the year-ago level of $5.30. Also, gathering, processing and transportation costs fell to $3.96 per Boe from $4.23.
Capital Expenditure & Balance Sheet
In the March quarter, it incurred a capital expenditure of $114.7 million, of which $111.6 million was allocated for drilling, completion and facilities.
At the first quarter-end, cash and cash equivalents were reported at $50.6 million. Long-term net debt outstanding amounted to $801.2 million. Centennial had a debt to capitalization of 22.4%.
Cash Flow & Free Cash Flow
The company’s constant focus on cost reduction helped it generate net cash of $160.1 million from operating activities compared with $72.4 million in the year-ago period. Free cash flow generated during the quarter under review was $88.8 million, up from $10.6 million.
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 -16.6% due to these changes.
VGM Scores
Currently, Centennial Resource has a great Growth Score of A, though it is lagging a lot 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, Centennial Resource has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Centennial Resource is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Southwestern Energy (SWN - Free Report) , a stock from the same industry, has gained 24.6%. The company reported its results for the quarter ended March 2022 more than a month ago.
Southwestern Energy reported revenues of $2.94 billion in the last reported quarter, representing a year-over-year change of +174.5%. EPS of $0.40 for the same period compares with $0.29 a year ago.
For the current quarter, Southwestern Energy is expected to post earnings of $0.32 per share, indicating a change of +68.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +13.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Southwestern Energy. Also, the stock has a VGM Score of A.
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It has been about a month since the last earnings report for Centennial Resource . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Centennial Resource 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 catalysts.
Centennial Misses on Q1 Earnings Estimates
Centennial Resource’s first-quarter adjusted earnings of 37 cents per share missed the Zacks Consensus Estimate of 40 cents. The bottom line, however, improved from the year-ago loss of 1 cent per share.
Quarterly revenues of $347 million increased from $192 million in the year-ago quarter and beat the Zacks Consensus Estimate of $307 million.
The lower-than-expected quarterly earnings of Centennial Resource were owing to increased lease operating expenses and exploration and other expenses. This was offset partially by higher oil equivalent volumes and commodity prices.
Operations:
Production
Centennial Resource’s overall production of 61,359 barrels of oil equivalent per day (Boe/d) increased from the year-ago period’s 54,202 Boe/d. Of the total output, 53.4% comprised crude oil.
Oil volumes increased from 28,239 Bbls/d to 32,741 barrels per day (Bbls/d) in the March quarter. Natural gas liquids (NGLs) production totaled 10,238 Bbls/d, up from the year-ago quarter’s 8,662 Bbls/d. Natural gas production of 110,280 thousand cubic feet per day (Mcf/d) increased from 103,806 Mcf/d.
Price Realizations
Average realized crude price (excluding the effects of derivative settlements) of Centennial Resource was reported at $89.17 a barrel, up from $52.62 in first-quarter 2021. The same for natural gas rose to $3.93 per Mcf from the prior year’s $3.79. Furthermore, NGLs price rose to $49.37 per barrel in the first quarter from $29.78.
Operating Costs
Centennial Resource’s total operating costs were $182.2 million in first-quarter 2022, higher than $158.4 million in the year-ago period due to increased lease operating expenses and exploration and other expenses.
On a per Boe basis, the company’s first-quarter lease operating expenses were $5.20, lower than the year-ago level of $5.30. Also, gathering, processing and transportation costs fell to $3.96 per Boe from $4.23.
Capital Expenditure & Balance Sheet
In the March quarter, it incurred a capital expenditure of $114.7 million, of which $111.6 million was allocated for drilling, completion and facilities.
At the first quarter-end, cash and cash equivalents were reported at $50.6 million. Long-term net debt outstanding amounted to $801.2 million. Centennial had a debt to capitalization of 22.4%.
Cash Flow & Free Cash Flow
The company’s constant focus on cost reduction helped it generate net cash of $160.1 million from operating activities compared with $72.4 million in the year-ago period. Free cash flow generated during the quarter under review was $88.8 million, up from $10.6 million.
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 -16.6% due to these changes.
VGM Scores
Currently, Centennial Resource has a great Growth Score of A, though it is lagging a lot 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, Centennial Resource has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Centennial Resource is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Southwestern Energy (SWN - Free Report) , a stock from the same industry, has gained 24.6%. The company reported its results for the quarter ended March 2022 more than a month ago.
Southwestern Energy reported revenues of $2.94 billion in the last reported quarter, representing a year-over-year change of +174.5%. EPS of $0.40 for the same period compares with $0.29 a year ago.
For the current quarter, Southwestern Energy is expected to post earnings of $0.32 per share, indicating a change of +68.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +13.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Southwestern Energy. Also, the stock has a VGM Score of A.
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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