A month has gone by since the last earnings report for Diamondback Energy (FANG - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Diamondback due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Diamondback Q1 Earnings and Revenues Miss Estimate
Diamondback Energy reported first-quarter 2023 adjusted earnings per share of $4.10, missing the Zacks Consensus Estimate of $4.36 and deteriorating from the year-ago bottom line of $5.20 per share. The underperformance reflects lower overall realization, partly offset by higher-than-expected production.
Moreover, revenues of $1.9 billion fell 20% from the year-ago quarter’s sales and lagged the Zacks Consensus Estimate by 1.3%.
In good news for investors, the company is using the excess cash from a supportive environment to reward them with dividends and buybacks. As part of that, FANG’s board of directors declared a quarterly cash dividend of 80 cents per share to its common shareholders of record on May 11. The payout will be made on May 18. In addition to the regular dividend, FANG declared a special dividend of 3 cents per share.
The company also executed $332 million of share repurchases during the first quarter of 2023 at $131.34 apiece.
Production & Realized Prices
FANG’s production of oil and natural gas averaged 425,022 barrels of oil equivalent per day (BOE/d), comprising 59% oil. The figure was up 11.4% from the year-ago quarter and surpassed the Zacks Consensus Estimate of 421,729 BOE/d. While crude and natural gas output increased 12.8% and 11.1% year over year, respectively, natural gas liquids volumes rose 7.9% from the first quarter of 2022.
The average realized oil price during the most recent quarter was $73.11 per barrel, in line with the consensus mark but 24.7% lower than the year-ago realization of $97.03. Meanwhile, the average realized natural gas price fell to $1.46 per thousand cubic feet (Mcf) from $3.61 in the year-ago period and missed the Zacks Consensus Estimate of $1.57. Overall, the company fetched $49.72 per barrel compared with $69.60 a year ago.
Costs & Financial Position
Diamondback’s first-quarter cash operating cost was $11.61 per barrel of oil equivalent (BOE) compared to $11.36 in the prior-year quarter. Lease operating expense was $5.02 per BOE compared with $4.34 in the first quarter of 2022. FANG’s production taxes decreased 13.6% year over year to $4.05 per BOE. On the other hand, gathering and transportation expenses shot up in the first quarter of 2023 to $1.78 per BOE from $1.72 during the corresponding period of 2022.
Diamondback spent $657 million in capital expenditure — $580 million on drilling and completion, $42 million on infrastructure, environment and $35 million on midstream. The company booked $646 million of free cash flows in the first quarter.
As of Mar 31, the Permian-focused operator had approximately $46 million in cash and cash equivalents, and $7 billion in long-term debt, representing a debt-to-capitalization of 30.1%.
Guidance
In 2023, FANG said it still looks to pump 430,000-440,000 BOE/d of hydrocarbon. Of this, oil volumes are likely to be 256,000-262,000 barrels per day. The company forecast a capital spending budget between $2.5 billion and $2.7 billion.
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 -8.99% due to these changes.
VGM Scores
At this time, Diamondback has a nice Growth Score of B, 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 B. 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, Diamondback has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Diamondback is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, CNX Resources Corporation. (CNX - Free Report) , a stock from the same industry, has gained 3%. The company reported its results for the quarter ended March 2023 more than a month ago.
CNX Resources Corporation. reported revenues of $395 million in the last reported quarter, representing a year-over-year change of -16.7%. EPS of $0.56 for the same period compares with $0.79 a year ago.
CNX Resources Corporation. is expected to post earnings of $0.38 per share for the current quarter, representing a year-over-year change of -37.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CNX Resources Corporation. Also, the stock has a VGM Score of C.
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A month has gone by since the last earnings report for Diamondback Energy (FANG - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Diamondback due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Diamondback Q1 Earnings and Revenues Miss Estimate
Diamondback Energy reported first-quarter 2023 adjusted earnings per share of $4.10, missing the Zacks Consensus Estimate of $4.36 and deteriorating from the year-ago bottom line of $5.20 per share. The underperformance reflects lower overall realization, partly offset by higher-than-expected production.
Moreover, revenues of $1.9 billion fell 20% from the year-ago quarter’s sales and lagged the Zacks Consensus Estimate by 1.3%.
In good news for investors, the company is using the excess cash from a supportive environment to reward them with dividends and buybacks. As part of that, FANG’s board of directors declared a quarterly cash dividend of 80 cents per share to its common shareholders of record on May 11. The payout will be made on May 18. In addition to the regular dividend, FANG declared a special dividend of 3 cents per share.
The company also executed $332 million of share repurchases during the first quarter of 2023 at $131.34 apiece.
Production & Realized Prices
FANG’s production of oil and natural gas averaged 425,022 barrels of oil equivalent per day (BOE/d), comprising 59% oil. The figure was up 11.4% from the year-ago quarter and surpassed the Zacks Consensus Estimate of 421,729 BOE/d. While crude and natural gas output increased 12.8% and 11.1% year over year, respectively, natural gas liquids volumes rose 7.9% from the first quarter of 2022.
The average realized oil price during the most recent quarter was $73.11 per barrel, in line with the consensus mark but 24.7% lower than the year-ago realization of $97.03. Meanwhile, the average realized natural gas price fell to $1.46 per thousand cubic feet (Mcf) from $3.61 in the year-ago period and missed the Zacks Consensus Estimate of $1.57. Overall, the company fetched $49.72 per barrel compared with $69.60 a year ago.
Costs & Financial Position
Diamondback’s first-quarter cash operating cost was $11.61 per barrel of oil equivalent (BOE) compared to $11.36 in the prior-year quarter. Lease operating expense was $5.02 per BOE compared with $4.34 in the first quarter of 2022. FANG’s production taxes decreased 13.6% year over year to $4.05 per BOE. On the other hand, gathering and transportation expenses shot up in the first quarter of 2023 to $1.78 per BOE from $1.72 during the corresponding period of 2022.
Diamondback spent $657 million in capital expenditure — $580 million on drilling and completion, $42 million on infrastructure, environment and $35 million on midstream. The company booked $646 million of free cash flows in the first quarter.
As of Mar 31, the Permian-focused operator had approximately $46 million in cash and cash equivalents, and $7 billion in long-term debt, representing a debt-to-capitalization of 30.1%.
Guidance
In 2023, FANG said it still looks to pump 430,000-440,000 BOE/d of hydrocarbon. Of this, oil volumes are likely to be 256,000-262,000 barrels per day. The company forecast a capital spending budget between $2.5 billion and $2.7 billion.
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 -8.99% due to these changes.
VGM Scores
At this time, Diamondback has a nice Growth Score of B, 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 B. 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, Diamondback has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Diamondback is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, CNX Resources Corporation. (CNX - Free Report) , a stock from the same industry, has gained 3%. The company reported its results for the quarter ended March 2023 more than a month ago.
CNX Resources Corporation. reported revenues of $395 million in the last reported quarter, representing a year-over-year change of -16.7%. EPS of $0.56 for the same period compares with $0.79 a year ago.
CNX Resources Corporation. is expected to post earnings of $0.38 per share for the current quarter, representing a year-over-year change of -37.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CNX Resources Corporation. Also, the stock has a VGM Score of C.
Where Will Stocks Go…
If Biden Wins? If Trump Wins?
The answers may surprise you.
Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!
Now is the time to download Zacks' free Special Report with 5 stocks that offer extreme upside for both Democrats and Republicans…
1. Medical manufacturer has gained +11,000% in the last 15 years.
2. Rental company is absolutely crushing its sector.
3. Energy powerhouse plans to grow its already large dividend by 25%.
4. Aerospace and defense standout just landed a potentially $80 billion contract.
5. Giant Chipmaker is building huge plants in the U.S.
Hurry, Download Special Report FREE >>
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