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Why Is ConocoPhillips (COP) Down 0.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for ConocoPhillips (COP - Free Report) . Shares have lost about 0.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ConocoPhillips 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 catalysts.
ConocoPhillips Beats Q2 Earnings on Higher Oil Prices
ConocoPhillips reported second-quarter 2021 adjusted earnings per share of $1.27, comfortably beating the Zacks Consensus Estimate of $1.15. Further, the figure significantly improved from adjusted loss of 92 cents per share a year ago.
Based in Houston, TX, one of the world’s largest independent oil and gas producers, ConocoPhillips’ quarterly revenues of $10,211 million increased from second-quarter 2020 sales of $4,016 million. Also, the figure beat the Zacks Consensus Estimate of $10,197 million.
The strong second-quarter results were aided by increased production volumes due to the Concho acquisition and rising realized commodity prices. Production from the Lower 48, Canada, Europe and other regions marked an increase.
Production
Total production averaged 1,588 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago quarter’s 981 MBoe/d. Of the total output, 53.5% was crude oil. Overall production was higher than the year-ago period, primarily due to significantly increased output in Lower 48, Canada and other regions. This was partially offset by decreased production in Asia Pacific. The Concho acquisition supported production volumes.
ConocoPhillips’ production of crude oil came in at 849 thousand barrels per day (MBbls/d), significantly higher than the year-ago quarter’s 474 MBbls/d. Also, natural gas output came in at 3,260 million cubic feet per day (MMcf/d), higher than the year-ago level of 2,277 MMcf/d. Also, bitumen production for the quarter was recorded at 68 MBbls/d, higher than the second-quarter 2020 figure of 34 MBbls/d. The company’s production of natural gas liquids totaled 128 MBbls/d, higher than the year-ago period’s 93 MBbls/d.
Realized Prices
Average realized oil equivalent prices rose to $50.03 per barrel from the year-ago level of $23.09.
The average realized crude oil price for the second quarter was $65.51 per barrel, reflecting an increase from the year-ago realization of $25.10. Realized natural gas liquids price was recorded at $26.87 per barrel, higher than the year-ago quarter’s $9.88. Average realized natural gas price for second-quarter 2021 was $4.16 per thousand cubic feet, up from the year-ago period’s $3.22. Average realized bitumen price was recorded at $37.60 per barrel, which also reflects a significant improvement from the year-ago level.
Total Expenses
ConocoPhillips’ second-quarter total expenses rose to $7,131 million from $3,995 million in the corresponding period of 2020.
Production and operating expenses rose to $1,379 million for the reported quarter from $1,047 million a year ago. Similarly, the cost of purchased commodities rose to $2,998 million for the quarter from $1,130 million a year ago. Nonetheless, exploration costs decreased to $57 million for the June quarter of 2021 from $97 million in the comparable period of 2020.
Balance Sheet & Capital Spending
As of Jun 30, 2021, the oil and gas giant had $6,608 million in total cash and cash equivalents, reflecting a massive jump from the first-quarter level of $2,831 million. The company had a total long-term debt of $18,805 million, down sequentially from $19,338 million. It had a debt-to-capitalization ratio of 0.31. At second quarter-end, the company had a short-term debt of $1,205 million.
Capital expenditures and investments totaled $1,265 million, and dividend payments grossed $583 million. Net cash provided by operating activities was recorded at $4,251 million, up from the year-ago figure of $157 million. It generated free cash flow of $2.8 billion in the second quarter.
Guidance
The company reiterated its full-year production guidance at 1.5 million barrels of oil equivalent per day (MMBoe/d). The figure indicates an improvement from the 2020 level of 1.1 MMBoe/d. Third-quarter production will likely be within 1.48-1.52 MMBoe/d.
For the full year, adjusted operating costs will likely be $6.1 billion. The company expects 2021 capital budget of $5.3 billion, indicating an increase from the 2020 level of around $4.7 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, ConocoPhillips has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, ConocoPhillips has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is ConocoPhillips (COP) Down 0.5% Since Last Earnings Report?
A month has gone by since the last earnings report for ConocoPhillips (COP - Free Report) . Shares have lost about 0.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ConocoPhillips 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 catalysts.
ConocoPhillips Beats Q2 Earnings on Higher Oil Prices
ConocoPhillips reported second-quarter 2021 adjusted earnings per share of $1.27, comfortably beating the Zacks Consensus Estimate of $1.15. Further, the figure significantly improved from adjusted loss of 92 cents per share a year ago.
Based in Houston, TX, one of the world’s largest independent oil and gas producers, ConocoPhillips’ quarterly revenues of $10,211 million increased from second-quarter 2020 sales of $4,016 million. Also, the figure beat the Zacks Consensus Estimate of $10,197 million.
The strong second-quarter results were aided by increased production volumes due to the Concho acquisition and rising realized commodity prices. Production from the Lower 48, Canada, Europe and other regions marked an increase.
Production
Total production averaged 1,588 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago quarter’s 981 MBoe/d. Of the total output, 53.5% was crude oil. Overall production was higher than the year-ago period, primarily due to significantly increased output in Lower 48, Canada and other regions. This was partially offset by decreased production in Asia Pacific. The Concho acquisition supported production volumes.
ConocoPhillips’ production of crude oil came in at 849 thousand barrels per day (MBbls/d), significantly higher than the year-ago quarter’s 474 MBbls/d. Also, natural gas output came in at 3,260 million cubic feet per day (MMcf/d), higher than the year-ago level of 2,277 MMcf/d. Also, bitumen production for the quarter was recorded at 68 MBbls/d, higher than the second-quarter 2020 figure of 34 MBbls/d. The company’s production of natural gas liquids totaled 128 MBbls/d, higher than the year-ago period’s 93 MBbls/d.
Realized Prices
Average realized oil equivalent prices rose to $50.03 per barrel from the year-ago level of $23.09.
The average realized crude oil price for the second quarter was $65.51 per barrel, reflecting an increase from the year-ago realization of $25.10. Realized natural gas liquids price was recorded at $26.87 per barrel, higher than the year-ago quarter’s $9.88. Average realized natural gas price for second-quarter 2021 was $4.16 per thousand cubic feet, up from the year-ago period’s $3.22. Average realized bitumen price was recorded at $37.60 per barrel, which also reflects a significant improvement from the year-ago level.
Total Expenses
ConocoPhillips’ second-quarter total expenses rose to $7,131 million from $3,995 million in the corresponding period of 2020.
Production and operating expenses rose to $1,379 million for the reported quarter from $1,047 million a year ago. Similarly, the cost of purchased commodities rose to $2,998 million for the quarter from $1,130 million a year ago. Nonetheless, exploration costs decreased to $57 million for the June quarter of 2021 from $97 million in the comparable period of 2020.
Balance Sheet & Capital Spending
As of Jun 30, 2021, the oil and gas giant had $6,608 million in total cash and cash equivalents, reflecting a massive jump from the first-quarter level of $2,831 million. The company had a total long-term debt of $18,805 million, down sequentially from $19,338 million. It had a debt-to-capitalization ratio of 0.31. At second quarter-end, the company had a short-term debt of $1,205 million.
Capital expenditures and investments totaled $1,265 million, and dividend payments grossed $583 million. Net cash provided by operating activities was recorded at $4,251 million, up from the year-ago figure of $157 million. It generated free cash flow of $2.8 billion in the second quarter.
Guidance
The company reiterated its full-year production guidance at 1.5 million barrels of oil equivalent per day (MMBoe/d). The figure indicates an improvement from the 2020 level of 1.1 MMBoe/d. Third-quarter production will likely be within 1.48-1.52 MMBoe/d.
For the full year, adjusted operating costs will likely be $6.1 billion. The company expects 2021 capital budget of $5.3 billion, indicating an increase from the 2020 level of around $4.7 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, ConocoPhillips has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, ConocoPhillips has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.