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Gulfport Energy (GPOR) Down 35.3% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Gulfport Energy (GPOR - Free Report) . Shares have lost about 35.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Gulfport Energy 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 drivers.

Gulfport Q2 Earnings Crush Loss Estimate

Gulfport Energy Corporation delivered second-quarter adjusted net earnings per share (EPS) of 29 cents, attributable to lower costs. Meanwhile, the Zacks Consensus Estimate was of a loss of one cent. Moreover, the bottom line improved from the year-ago earnings of 21 cents a share.

However, revenues of $132.41 million fell shy of the Zacks Consensus Estimate by 38.24%. Moreover, the top line plunged from the year-ago figure of $458.99 million amid weaker year-over-year natural gas price realizations and weak production volumes.

Production & Realized Prices

Gulfport’s total oil and gas production decreased to 93,463 million cubic feet equivalent (MMcfe) from 123,668MMcfe in the corresponding period of last year. Volumes were also lower than the Zacks Consensus Estimate of 94,081 MMcfe. Of the total output, 90.9% comprised natural gas. Gas production from the Utica Shale dropped 24.6% year over year to 72,082MMcfe. Nearly, 77.1% of the output came from the Utica acreage. Output from SCOOP came in at 21,330MMcfe, down from the year-ago level of $27,149MMcfe.

Average realized natural gas price (before the impact of derivatives) during the second quarter was $1.02 per thousand cubic feet, lower than the year-ago period’s $2.02. Average realized natural gas liquids price was 25 cents per gallon, down from the year-ago quarter’s 45 cents. Gulfport fetched $20.14 per barrel of oil during the quarter, down from the year-ago figure of $56.85. Overall, the company realized $1.13 per thousand cubic feet equivalent in the quarter compared with $2.33 a year ago.

Costs, Capex and Balance Sheet

Total expenses in the quarter under review amounted to $688.2 million, higher than $240.5 million in the prior-year period. This downside is mainly attributed to higher impairment charges of oil and natural gas properties incurred in the reported quarter. Meanwhile, depreciation costs plunged 48.1% from the prior-year quarter to $64.8 million while lease operating expense fell 29.9% from the year-ago figure to $15.7 million.

In the second quarter, Gulfport spent $51.7 million on drilling and completion. As of Jun 30, this natural gas-weighted energy explorer had $2.8 million in cash and cash equivalents. Gulfport had a long-term debt of $1,910 million, representing total debt to total capital of 89.2%.

2020 Guidance

As a result of the coronavirus- induced economic downturn, this upstream player reiterates its current-year capital expenditure view at the lower end of the $285-$310 million band.

Gulfport also maintains its previously announced plan in June to prune that targets current-year net production of 1-1.1 billion cubic feet equivalent per day (Bcfe/d). This was down from the prior guidance of 1.1-1.5 Bcfe/d. This downtrend was induced by shut-ins and deferred completions. Further, the company projects its third-quarter 2020 production to average at 980 million-1.03 Bcfe/d. At the midpoint, it is lower than  the second quarter production of 1.03 Bcfe/d as well as the year-ago reported figure of 1.53Bcfe/d – reflecting Gulfport’s curtailment strategy.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 12.56% due to these changes.

VGM Scores

Currently, Gulfport Energy has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% 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

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Gulfport Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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