A month has gone by since the last earnings report for Cabot Oil . Shares have lost about 5.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cabot 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.
Cabot Oil Q4 Earnings and Sales Beat Estimates
Cabot’s fourth-quarter 2020 net income per share — adjusted for special items — of 26 cents beat the Zacks Consensus Estimate of 20 cents. The bottom line was favored by strong production volumes and a tight leash on costs. Precisely, daily production, at 2,375 million cubic feet equivalent (Mmcfe) outpaced the company’s top-end of the guidance.
However, the bottom line plunged 13.3% from the year-ago quarter’s figure of 30 cents due to decline in natural gas prices.
Quarterly revenues of $456.78 million surpassed the Zacks Consensus Estimate of $410 million. However, the top line fell slightly from the prior-year quarter’s figure of $461 million.
Production, Prices, Costs & Drilling Statistics
In fourth-quarter 2020, Cabot’s overall production summed 218.5 Bcfe, comprising 100% natural gas. However, the figure dropped 3.4% from the prior-year quarter’s volume of 226.1 Bcfe.
Average realized natural gas price (excluding hedges) fell to $1.89 per thousand cubic feet from the year-ago quarter’s $2.05.
Total operating expenses were $293.5 million, down 4.9% from the figure reported in fourth-quarter 2019. The depreciation and amortization costs fell 9.3% year over year to $96.5 million.
Notably, total average unit costs declined to $1.39 per thousand cubic feet equivalent (Mcfe) from the year-ago quarter’s figure of $1.43.
Cabot drilled 19 wells and completed 15 during the quarter.
Financial Position
Operating cash flows were $307.8 million (up 17.1% year over year), while capital expenditures totaled $97.4 million (down 49.1%). As of Dec 31, 2020, the company had cash and cash equivalents worth $140.1 million and total debt of $945.9 million with debt-to-capitalization of 33.9%.
In a separate press release, Cabot’s board of directors approved a regular dividend of 10 cents per share on the company's common stock, payable Feb 4, 2021 to all its shareholders of record as of Jan 21, 2021.
Outlook
For 2021, Cabot retains its initial production guidance of 2,350 Mmcfe a day from an expected capital program of $530-$540 million.
This Houston-based company sets the quarterly production guidance ranging between 2,250 Mmcfe and 2,300 Mmcfe per day for the first quarter of 2021.
Meanwhile, the company disclosed its updated capital return framework, which involves the enforcement of a "base plus supplemental" dividend approach. On this basis, Cabot intends to continue funding its regular quarterly base dividend on the company's common stock and supplement it with annual supplemental cash dividends to attain its minimum capital return target of 50% of annual free cash flow.
Notably, any extra free cash flow generated above the minimum capital return target will be availed to strengthen the company’s balance sheet, additional supplemental dividends, or opportunistic share repurchases, subject to market conditions.
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 6.47% due to these changes.
VGM Scores
At this time, Cabot has an average Growth Score of C, however its Momentum Score is doing a lot 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 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Cabot has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Cabot (COG) Down 5.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Cabot Oil . Shares have lost about 5.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cabot 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.
Cabot Oil Q4 Earnings and Sales Beat Estimates
Cabot’s fourth-quarter 2020 net income per share — adjusted for special items — of 26 cents beat the Zacks Consensus Estimate of 20 cents. The bottom line was favored by strong production volumes and a tight leash on costs. Precisely, daily production, at 2,375 million cubic feet equivalent (Mmcfe) outpaced the company’s top-end of the guidance.
However, the bottom line plunged 13.3% from the year-ago quarter’s figure of 30 cents due to decline in natural gas prices.
Quarterly revenues of $456.78 million surpassed the Zacks Consensus Estimate of $410 million. However, the top line fell slightly from the prior-year quarter’s figure of $461 million.
Production, Prices, Costs & Drilling Statistics
In fourth-quarter 2020, Cabot’s overall production summed 218.5 Bcfe, comprising 100% natural gas. However, the figure dropped 3.4% from the prior-year quarter’s volume of 226.1 Bcfe.
Average realized natural gas price (excluding hedges) fell to $1.89 per thousand cubic feet from the year-ago quarter’s $2.05.
Total operating expenses were $293.5 million, down 4.9% from the figure reported in fourth-quarter 2019. The depreciation and amortization costs fell 9.3% year over year to $96.5 million.
Notably, total average unit costs declined to $1.39 per thousand cubic feet equivalent (Mcfe) from the year-ago quarter’s figure of $1.43.
Cabot drilled 19 wells and completed 15 during the quarter.
Financial Position
Operating cash flows were $307.8 million (up 17.1% year over year), while capital expenditures totaled $97.4 million (down 49.1%). As of Dec 31, 2020, the company had cash and cash equivalents worth $140.1 million and total debt of $945.9 million with debt-to-capitalization of 33.9%.
In a separate press release, Cabot’s board of directors approved a regular dividend of 10 cents per share on the company's common stock, payable Feb 4, 2021 to all its shareholders of record as of Jan 21, 2021.
Outlook
For 2021, Cabot retains its initial production guidance of 2,350 Mmcfe a day from an expected capital program of $530-$540 million.
This Houston-based company sets the quarterly production guidance ranging between 2,250 Mmcfe and 2,300 Mmcfe per day for the first quarter of 2021.
Meanwhile, the company disclosed its updated capital return framework, which involves the enforcement of a "base plus supplemental" dividend approach. On this basis, Cabot intends to continue funding its regular quarterly base dividend on the company's common stock and supplement it with annual supplemental cash dividends to attain its minimum capital return target of 50% of annual free cash flow.
Notably, any extra free cash flow generated above the minimum capital return target will be availed to strengthen the company’s balance sheet, additional supplemental dividends, or opportunistic share repurchases, subject to market conditions.
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 6.47% due to these changes.
VGM Scores
At this time, Cabot has an average Growth Score of C, however its Momentum Score is doing a lot 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 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Cabot has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.