A month has gone by since the last earnings report for Continental Resources . Shares have added about 14% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Continental 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 catalysts.
Continental Q1 Earnings and Revenues Top Estimates
Continental Resources, Inc.reported first-quarter 2021 adjusted earnings of 77 cents per share, beating the Zacks Consensus Estimate of 52 cents per share. Moreover, the bottom line improved substantially from a loss of 8 cents per share in the year-ago quarter.
Total quarterly revenues of $1,216 million surpassed the Zacks Consensus Estimate of $1,066 million. Also, the top line increased 38% from the year-ago figure of $881 million per share.
The strong quarterly results gained from higher realizations of commodity prices and lower operating expenses.
Oil Production Declines
Production from continuing operations averaged 307,942 barrels of oil equivalent per day (Boe/d) for the reported quarter (49.3% oil) versus 360,841 Boe/d in the year-ago period. Production volumes declined primarily due to lower output from Bakken assets.
Oil production for the reported quarter was 151,852 barrels per day (Bbls/d), down from 200,671 Bbls/d a year ago. Moreover, natural gas production declined from 961,022 thousand cubic feet per day (Mcf/d) in first-quarter 2020 to 936,540 Mcf/d.
Crude Equivalent Price Realization Rises
Crude oil equivalent price for the reported quarter increased to $43.11 per barrel from $24.44 in the prior-year period. Moreover, natural gas was sold at $5.56 per Mcf, up from 90 cents in the year-ago quarter. Notably, average realized price for oil was $53.09 a barrel, up from $39.64 in the prior-year quarter.
Total Expenses Plunge
Total operating expenses of $810.1 million for the first quarter fell from $1,074.4 million in the March-end quarter of 2020. Total production costs fell to $93.1 million from $118.5 million in the year-ago quarter. Exploration costs for the reported quarter were $4.6 million compared with $11.6 million in the year-ago period. Transportation costs fell to $50.3 million from the year-ago level of $60.5 million.
Financials
For first-quarter 2021, total capital expenditure (excluding acquisitions) was $293.4 million. It generated free cash flow of $605.9 million in the reported quarter.
As of Mar 31, 2021, the company had total cash and cash equivalents of $96.1 million. It had long-term debt of $4,971.1 million (excluding current maturities). It had a debt to capitalization of 42.6%.
Dividend
The company’s board of directors reinstated a quarterly dividend payment. The new dividend of 11 cents per share more than doubled from the last payment. The amount will be paid out on May 24, 2021, to its stockholders of record as of May 10, 2021.
Outlook
For 2021, the company maintains its average oil production guidance at 160,000-165,000 barrels per day. Its natural gas production remains at 880,000-920,000 Mcf/d. Notably, the upstream player expects a capital spending of $1.4 billion for 2021.
Moreover, the company plans to generate $3.1 billion of cash flow from operations and $1.7 billion of free cash flow for 2021.
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 30.15% due to these changes.
VGM Scores
At this time, Continental Resources has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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. It comes with little surprise Continental Resources has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Continental Resources (CLR) Up 14% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Continental Resources . Shares have added about 14% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Continental 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 catalysts.
Continental Q1 Earnings and Revenues Top Estimates
Continental Resources, Inc.reported first-quarter 2021 adjusted earnings of 77 cents per share, beating the Zacks Consensus Estimate of 52 cents per share. Moreover, the bottom line improved substantially from a loss of 8 cents per share in the year-ago quarter.
Total quarterly revenues of $1,216 million surpassed the Zacks Consensus Estimate of $1,066 million. Also, the top line increased 38% from the year-ago figure of $881 million per share.
The strong quarterly results gained from higher realizations of commodity prices and lower operating expenses.
Oil Production Declines
Production from continuing operations averaged 307,942 barrels of oil equivalent per day (Boe/d) for the reported quarter (49.3% oil) versus 360,841 Boe/d in the year-ago period. Production volumes declined primarily due to lower output from Bakken assets.
Oil production for the reported quarter was 151,852 barrels per day (Bbls/d), down from 200,671 Bbls/d a year ago. Moreover, natural gas production declined from 961,022 thousand cubic feet per day (Mcf/d) in first-quarter 2020 to 936,540 Mcf/d.
Crude Equivalent Price Realization Rises
Crude oil equivalent price for the reported quarter increased to $43.11 per barrel from $24.44 in the prior-year period. Moreover, natural gas was sold at $5.56 per Mcf, up from 90 cents in the year-ago quarter. Notably, average realized price for oil was $53.09 a barrel, up from $39.64 in the prior-year quarter.
Total Expenses Plunge
Total operating expenses of $810.1 million for the first quarter fell from $1,074.4 million in the March-end quarter of 2020. Total production costs fell to $93.1 million from $118.5 million in the year-ago quarter. Exploration costs for the reported quarter were $4.6 million compared with $11.6 million in the year-ago period. Transportation costs fell to $50.3 million from the year-ago level of $60.5 million.
Financials
For first-quarter 2021, total capital expenditure (excluding acquisitions) was $293.4 million. It generated free cash flow of $605.9 million in the reported quarter.
As of Mar 31, 2021, the company had total cash and cash equivalents of $96.1 million. It had long-term debt of $4,971.1 million (excluding current maturities). It had a debt to capitalization of 42.6%.
Dividend
The company’s board of directors reinstated a quarterly dividend payment. The new dividend of 11 cents per share more than doubled from the last payment. The amount will be paid out on May 24, 2021, to its stockholders of record as of May 10, 2021.
Outlook
For 2021, the company maintains its average oil production guidance at 160,000-165,000 barrels per day. Its natural gas production remains at 880,000-920,000 Mcf/d. Notably, the upstream player expects a capital spending of $1.4 billion for 2021.
Moreover, the company plans to generate $3.1 billion of cash flow from operations and $1.7 billion of free cash flow for 2021.
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 30.15% due to these changes.
VGM Scores
At this time, Continental Resources has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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. It comes with little surprise Continental Resources has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.