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Pioneer Natural Resources (PXD) Up 7.5% 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 7.5% 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 Q4 Earnings Top Estimates

Pioneer Natural’sfourth-quarter 2020 earnings per share of $1.07, excluding one-time items, beat the Zacks Consensus Estimate of 66 cents. The bottom line, however, declined from the year-ago quarter’s $2.36 per share.

Revenues and other income declined year over year to $1,856 million from $2,643 million a year ago. However, the top line beat the consensus mark of $1,804 million.

The company reported better-than-expected results due to increased crude oil equivalent production volumes. The was offset partially by lower crude price realizations.  

Production

Total production for the reported quarter was 364.5 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago figure of 363.4 MBoe/d.

Oil production was 204.5 thousand barrels per day (MBbls/d), down from the year-ago quarter’s 220.3 MBbls/d. NGLs production was 85.8 MBbls/d compared with the year-ago quarter’s 80.2 MBbls/d. Moreover, natural gas production amounted to 445.4 million cubic feet per day (MMcf/d), up from the year-ago quarter’s 377.3 MMcf/d.

Price Realization

On an oil-equivalent basis, average realized price was $30.22 per barrel for the reported quarter compared with $40.36 a year ago. The company reported average realized crude price of $40.94 a barrel, down from $56.01 in the December quarter of 2019.  

Average natural gas price improved to $2.37 per thousand cubic feet (Mcf) from $2.21 in the prior-year quarter. However, natural gas liquids were sold at $18.51 a barrel, down from $18.60 a year ago.

Operating Costs

The company’s expenses for oil and gas production were $175 million, down from $207 million in the year-ago quarter. As such, total costs and expenses decreased to $1,828 million for the fourth quarter from $2,195 million in the year-ago period.

Cash, Debt and Capex

At the end of the quarter under review, cash balance totaled $1,442 million while long-term debt summed $3,160 million. It had a debt to capitalization of 22.2%. The current portion of the long-term debt was $140 million.

During the December quarter of 2020, the company spent $351 million.

Proved Reserves Grow

As of Dec 31, 2020, the company reported proved reserves of 1,271,321 MBoe, up from the year-ago period’s 1,135,652 MBOE.

Guidance

Pioneer projects oil production for the March quarter of 2021 in the band of 259 to 274 thousand barrel per day (MBbls/d). For the first quarter, the company expects total production in the range of 444-470 MBoe/D.

For 2021, the upstream player anticipates oil production in the band of 307-322 MBbls/d. Also, the company projects total production for this year in the range of 528 to 554 MBoe/D. Pioneer provided production outlook based on its 2021 capital budget of $2.4 billion to $2.7 billion. Notably, the company believes this capital spending will be fully funded by its $4.6 billion of projected cash flow.

Pioneer projects free cashflow for 2021 at $2 billion. Moreover, from 2022, the company is planning to start distributing quarterly variable dividend.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 10.15% due to these changes.

VGM Scores

At this time, Pioneer Natural Resources has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. 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. It comes with little surprise Pioneer Natural Resources has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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