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EQT Corp. (EQT) Down Since Q2 Earnings Beat on High Gas Output
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Despite reporting strong second-quarter results, EQT Corporation’s (EQT - Free Report) shares have declined 10.6% since Jul 28. Investors have been worried as the company incurred a $1.3-billion loss in the second quarter on swaps and options.
It reported second-quarter 2021 adjusted earnings from continuing operations of 7 cents per share, beating the Zacks Consensus Estimate of 4 cents and improving from the year-ago loss of 18 cents.
Adjusted operating revenues increased to $996.9 million from $816.2 million in the prior-year quarter. Yet, the top line missed the Zacks Consensus Estimate of $1,010 million.
The strong second-quarter results were backed by increased production volumes, higher realized commodity price realizations and lower operating expenses.
Sales volumes increased to 420.6 billion cubic feet equivalent (Bcfe) per day from the year-ago figure of 345.7 Bcfe. Natural gas sales volume was 394.3 Bcf for the second quarter, up from 325.3 Bcf a year ago. Total liquids sales volume for the quarter was recorded at 4,388 thousand barrels (MBbls) versus the year-ago period’s 3,399 MBbls.
Commodity Price Realizations
Average realized price was $2.37 per thousand cubic feet of natural gas equivalent (Mcfe), marginally up from $2.36 in the year-ago quarter. Natural gas price was recorded at $3 per Mcf, up from the year-ago level of $1.80. Further, oil price was recorded at $56.18 per barrel, up from $10.17 in second-quarter 2020. Also, ethane sales price was recorded at $6.58 per barrel for the second quarter, higher than the year-ago level of $3.38.
Expenses
Total operating expenses were $1.33 per Mcfe for second-quarter 2021, down from $1.42 in the prior-year period.
Processing expenses were 11 cents per Mcfe, up from the year-ago period’s 10 cents. Gathering expenses were down to 68 cents per Mcfe from 73 cents a year ago. Lease operating expenses also declined to 6 cents from the year-ago level of 7 cents. Further, transmission costs decreased to 31 cents per Mcfe from the year-ago level of 35 cents.
Wells Drilled
The company drilled 16 net wells in the second quarter and all of them were in the SWPA Marcellus. It did not drill wells in WV Marcellus in the second quarter. This is expected to change in the third quarter, when the number will likely rise to 8.
Cash Flows
EQT Corp.’s adjusted operating cash flow was $396.6 million for the quarter, up from $220.7 million a year ago. Free cash flow for the quarter was $154.9 million, improving from the year-ago free cash outflow of $82 million.
Capex & Balance Sheet
Total capital expenditure amounted to $245.5 million for the second quarter, down from $302.7 million a year ago.
As of Jun 30, 2021, the company had $330.8 million in cash and cash equivalents, up sequentially from $$40.7 million. Total debt was reported at $5,496.3 million, up from $4,806 million at first quarter-end.
Guidance
For 2021, the largest natural gas producer of the United States increased total sales volumes to the band of 1,800-1,875 Bcfe from the previous expected range of 1,620-1,700 Bcfe. The company projects 2021 total per unit operating costs within $1.22-$1.34 per Mcfe, down from previous expectation of $1.29-$1.41 per Mcfe.
Adjusted earnings before interest, taxes, depreciation and amortization for 2021 are expected within $2.1-$2.175 billion, up from the previous guided range of $1.85-$1.95 billion. Capital expenditure for the year is expected in the range of $1.100-$1.175 billion, up from prior expectation of $1.025-$1.125 billion. Importantly, free cash flow is now projected in the band of $725-$800 million, up from the previous guided range of $575-$675 million. It expects to achieve net-zero emissions from Scope 1 and 2 within 2025.
The Zacks Consensus Estimate for Range Resources’ earnings for 2021 is pegged at $1.53 per share, indicating a massive improvement from the year-ago loss of 9 cents.
Hess’ profits for 2021 are expected to jump 177.1% year over year.
Summit Midstream’s bottom line has witnessed two upward estimate revisions and no downward movement in the past 30 days.
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EQT Corp. (EQT) Down Since Q2 Earnings Beat on High Gas Output
Despite reporting strong second-quarter results, EQT Corporation’s (EQT - Free Report) shares have declined 10.6% since Jul 28. Investors have been worried as the company incurred a $1.3-billion loss in the second quarter on swaps and options.
It reported second-quarter 2021 adjusted earnings from continuing operations of 7 cents per share, beating the Zacks Consensus Estimate of 4 cents and improving from the year-ago loss of 18 cents.
Adjusted operating revenues increased to $996.9 million from $816.2 million in the prior-year quarter. Yet, the top line missed the Zacks Consensus Estimate of $1,010 million.
The strong second-quarter results were backed by increased production volumes, higher realized commodity price realizations and lower operating expenses.
EQT Corporation Price, Consensus and EPS Surprise
EQT Corporation price-consensus-eps-surprise-chart | EQT Corporation Quote
Q2 Operations
Production
Sales volumes increased to 420.6 billion cubic feet equivalent (Bcfe) per day from the year-ago figure of 345.7 Bcfe. Natural gas sales volume was 394.3 Bcf for the second quarter, up from 325.3 Bcf a year ago. Total liquids sales volume for the quarter was recorded at 4,388 thousand barrels (MBbls) versus the year-ago period’s 3,399 MBbls.
Commodity Price Realizations
Average realized price was $2.37 per thousand cubic feet of natural gas equivalent (Mcfe), marginally up from $2.36 in the year-ago quarter. Natural gas price was recorded at $3 per Mcf, up from the year-ago level of $1.80. Further, oil price was recorded at $56.18 per barrel, up from $10.17 in second-quarter 2020. Also, ethane sales price was recorded at $6.58 per barrel for the second quarter, higher than the year-ago level of $3.38.
Expenses
Total operating expenses were $1.33 per Mcfe for second-quarter 2021, down from $1.42 in the prior-year period.
Processing expenses were 11 cents per Mcfe, up from the year-ago period’s 10 cents. Gathering expenses were down to 68 cents per Mcfe from 73 cents a year ago. Lease operating expenses also declined to 6 cents from the year-ago level of 7 cents. Further, transmission costs decreased to 31 cents per Mcfe from the year-ago level of 35 cents.
Wells Drilled
The company drilled 16 net wells in the second quarter and all of them were in the SWPA Marcellus. It did not drill wells in WV Marcellus in the second quarter. This is expected to change in the third quarter, when the number will likely rise to 8.
Cash Flows
EQT Corp.’s adjusted operating cash flow was $396.6 million for the quarter, up from $220.7 million a year ago. Free cash flow for the quarter was $154.9 million, improving from the year-ago free cash outflow of $82 million.
Capex & Balance Sheet
Total capital expenditure amounted to $245.5 million for the second quarter, down from $302.7 million a year ago.
As of Jun 30, 2021, the company had $330.8 million in cash and cash equivalents, up sequentially from $$40.7 million. Total debt was reported at $5,496.3 million, up from $4,806 million at first quarter-end.
Guidance
For 2021, the largest natural gas producer of the United States increased total sales volumes to the band of 1,800-1,875 Bcfe from the previous expected range of 1,620-1,700 Bcfe. The company projects 2021 total per unit operating costs within $1.22-$1.34 per Mcfe, down from previous expectation of $1.29-$1.41 per Mcfe.
Adjusted earnings before interest, taxes, depreciation and amortization for 2021 are expected within $2.1-$2.175 billion, up from the previous guided range of $1.85-$1.95 billion. Capital expenditure for the year is expected in the range of $1.100-$1.175 billion, up from prior expectation of $1.025-$1.125 billion. Importantly, free cash flow is now projected in the band of $725-$800 million, up from the previous guided range of $575-$675 million. It expects to achieve net-zero emissions from Scope 1 and 2 within 2025.
Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space include Range Resources Corporation (RRC - Free Report) , Hess Corporation (HES - Free Report) and Summit Midstream Partners, LP (SMLP - Free Report) , each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Range Resources’ earnings for 2021 is pegged at $1.53 per share, indicating a massive improvement from the year-ago loss of 9 cents.
Hess’ profits for 2021 are expected to jump 177.1% year over year.
Summit Midstream’s bottom line has witnessed two upward estimate revisions and no downward movement in the past 30 days.