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Range Resources (RRC) Down 10% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Range Resources (RRC - Free Report) . Shares have lost about 10% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Range Resources due for a breakout? 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.
Range Resources Q4 Earnings Miss, Revenues Top Estimates
Range Resources reported fourth-quarter 2020 adjusted earnings of 2 cents per share, which missed the Zacks Consensus Estimate of 6 cents per share. Moreover, the bottom line plunged 75% year over year from 8 cents per share.
Total revenues for the reported quarter were $598.9 million, surpassing the Zacks Consensus Estimate of $511 million. However, the top line deteriorated from the prior-year number of $605.6 million.
The lower-than-expected earnings can be attributed to decreased commodity prices and low overall production volumes. This was partially offset by a decline in direct operating costs.
Operational Performance
For fourth-quarter 2020, the company’s production averaged 2,087.7 million cubic feet equivalent per day, down 11% from the prior-year period. Natural gas contributed 70.2% to total production, while NGLs and oil accounted for the remaining.
Oil and NGL production fell 39% and 9%, respectively, on a year-over-year basis. Moreover, natural gas production decreased 11% from the prior-year quarter.
Its total price realization (including derivative settlements and after third-party transportation costs) averaged $1.07 per thousand cubic feet equivalent (Mcfe), down 22% year over year. Natural gas prices declined 27% on a year-over-year basis to 91 cents per Mcf. Moreover, NGL and oil prices fell 1% and 5%, respectively.
Expenses Decline
Total exploration costs declined to $9.1 million from $9.2 million a year ago. Moreover, on a unit basis, transportation, gathering, processing and compression expenses were recorded at $1.34 per Mcfe, lower than $1.39 in the prior-year quarter. Also, direct operating costs contracted to 8 cents per Mcfe from the year-ago figure of 15 cents.
Capital Expenditure & Balance Sheet
The company’s drilling and completion expenditure totaled $93 million for fourth-quarter 2020. Total capex was recorded at $113 million for the reported quarter.
At the end of the fourth quarter, it had total debt of $3,040.3 million, with a debt-to-capitalization of 65%.
Outlook
For 2021, Range Resources expects total production to average 2.15 Bcfe per day, with 30% allocated to liquids production. Moreover, the company’s overall capital budget is estimated to be $425 million.
Notably, exploration expense for 2021 is estimated to be $24-$30 million. On a per-unit basis, direct operating expenses for the year are expected to be 9-11 cents per Mcfe. Transport, gathering, processing and compression expenses are estimated to be $1.35-$1.40 per Mcfe.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 29.57% due to these changes.
VGM Scores
Currently, Range Resources has a poor Growth Score of F, 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 second quintile 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Range Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Range Resources (RRC) Down 10% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Range Resources (RRC - Free Report) . Shares have lost about 10% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Range Resources due for a breakout? 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.
Range Resources Q4 Earnings Miss, Revenues Top Estimates
Range Resources reported fourth-quarter 2020 adjusted earnings of 2 cents per share, which missed the Zacks Consensus Estimate of 6 cents per share. Moreover, the bottom line plunged 75% year over year from 8 cents per share.
Total revenues for the reported quarter were $598.9 million, surpassing the Zacks Consensus Estimate of $511 million. However, the top line deteriorated from the prior-year number of $605.6 million.
The lower-than-expected earnings can be attributed to decreased commodity prices and low overall production volumes. This was partially offset by a decline in direct operating costs.
Operational Performance
For fourth-quarter 2020, the company’s production averaged 2,087.7 million cubic feet equivalent per day, down 11% from the prior-year period. Natural gas contributed 70.2% to total production, while NGLs and oil accounted for the remaining.
Oil and NGL production fell 39% and 9%, respectively, on a year-over-year basis. Moreover, natural gas production decreased 11% from the prior-year quarter.
Its total price realization (including derivative settlements and after third-party transportation costs) averaged $1.07 per thousand cubic feet equivalent (Mcfe), down 22% year over year. Natural gas prices declined 27% on a year-over-year basis to 91 cents per Mcf. Moreover, NGL and oil prices fell 1% and 5%, respectively.
Expenses Decline
Total exploration costs declined to $9.1 million from $9.2 million a year ago. Moreover, on a unit basis, transportation, gathering, processing and compression expenses were recorded at $1.34 per Mcfe, lower than $1.39 in the prior-year quarter. Also, direct operating costs contracted to 8 cents per Mcfe from the year-ago figure of 15 cents.
Capital Expenditure & Balance Sheet
The company’s drilling and completion expenditure totaled $93 million for fourth-quarter 2020. Total capex was recorded at $113 million for the reported quarter.
At the end of the fourth quarter, it had total debt of $3,040.3 million, with a debt-to-capitalization of 65%.
Outlook
For 2021, Range Resources expects total production to average 2.15 Bcfe per day, with 30% allocated to liquids production. Moreover, the company’s overall capital budget is estimated to be $425 million.
Notably, exploration expense for 2021 is estimated to be $24-$30 million. On a per-unit basis, direct operating expenses for the year are expected to be 9-11 cents per Mcfe. Transport, gathering, processing and compression expenses are estimated to be $1.35-$1.40 per Mcfe.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 29.57% due to these changes.
VGM Scores
Currently, Range Resources has a poor Growth Score of F, 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 second quintile 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Range Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.