A month has gone by since the last earnings report for Continental Resources . Shares have added about 4.6% 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 Resources Beats on Q4 Earnings Estimates
Continental Resources reported fourth-quarter 2021 adjusted earnings of $1.79 per share, beating the Zacks Consensus Estimate of $1.73. The bottom line turned around from the year-ago quarter’s loss of 23 cents per share.
Total quarterly revenues of $1,927 million surpassed the Zacks Consensus Estimate of $1,703 million. The top line also improved from the year-ago quarter’s $838 million.
The strong quarterly results can be attributed to increased natural gas production volumes and higher realizations of commodity prices.
Dividend Hike
The company’s board of directors announced a quarterly dividend payment of 23 cents per share, a 15% increase from 20 cents paid out in the previous quarter. The amount will be paid out on Mar 4, 2022, to stockholders of record as of Feb 22, 2022.
The company increased its existing share repurchase program to $1.5 billion, including $441 million worth of share repurchases to date.
Oil Production
Production from continuing operations averaged 340,168 barrels of oil equivalent per day (Boe/d) for the reported quarter (49% oil) versus 339,307 Boe/d in the year-ago period. Production volumes increased, owing to higher output from Bakken and Oklahoma assets.
Oil production for the reported quarter was 166,694 barrels per day (Bbls/d), down from 176,639 Bbls/d a year ago. Natural gas production increased from 976,011 thousand cubic feet per day (Mcf/d) in fourth-quarter 2020 to 1,040,842 Mcf/d.
Crude Equivalent Price Realization
For fourth-quarter 2021, the crude oil equivalent price increased to $55.27 per barrel from $24.63 in the prior-year period. Natural gas was sold at $6.31 per Mcf, up from $1.81 in the year-ago quarter. The average realized price for oil was $73.19 a barrel, up from $37.34 in the prior-year quarter.
Total Expenses
In fourth-quarter 2021, total operating expenses of $861.9 million declined from $869.3 million in the December-end quarter of 2020. However, total production costs increased to $114.1 million from $87.4 million in the year-ago quarter. Exploration costs for the reported quarter were $11.6 million compared with $3.1 million in the year-ago period. Transportation costs increased to $68.3 million from the year-ago level of $48.6 million.
Financials
For fourth-quarter 2021, the total capital expenditure was $585.7 million. It generated a free cash flow of $728.9 million in the reported quarter.
As of Dec 31, 2021, the company had total cash and cash equivalents of $20.9 million. It had long-term debt of $6,826.6 million (excluding current maturities). It had a debt-to-capitalization of 46.5%.
Outlook
For 2022, Continental Resources expects average oil production of 195,000-205,000 Bbls/d. Natural gas production is expected to be 1,040,000-1,140,000 Mcf/d. The upstream player announces its capital spending budget at $2.3 billion for the year.
Notably, the company plans to generate $5.2 billion of cash flow from operations and $2.9 billion of free cash flow in 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Continental Resources has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Continental Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Image: Bigstock
Continental Resources (CLR) Up 4.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Continental Resources . Shares have added about 4.6% 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 Resources Beats on Q4 Earnings Estimates
Continental Resources reported fourth-quarter 2021 adjusted earnings of $1.79 per share, beating the Zacks Consensus Estimate of $1.73. The bottom line turned around from the year-ago quarter’s loss of 23 cents per share.
Total quarterly revenues of $1,927 million surpassed the Zacks Consensus Estimate of $1,703 million. The top line also improved from the year-ago quarter’s $838 million.
The strong quarterly results can be attributed to increased natural gas production volumes and higher realizations of commodity prices.
Dividend Hike
The company’s board of directors announced a quarterly dividend payment of 23 cents per share, a 15% increase from 20 cents paid out in the previous quarter. The amount will be paid out on Mar 4, 2022, to stockholders of record as of Feb 22, 2022.
The company increased its existing share repurchase program to $1.5 billion, including $441 million worth of share repurchases to date.
Oil Production
Production from continuing operations averaged 340,168 barrels of oil equivalent per day (Boe/d) for the reported quarter (49% oil) versus 339,307 Boe/d in the year-ago period. Production volumes increased, owing to higher output from Bakken and Oklahoma assets.
Oil production for the reported quarter was 166,694 barrels per day (Bbls/d), down from 176,639 Bbls/d a year ago. Natural gas production increased from 976,011 thousand cubic feet per day (Mcf/d) in fourth-quarter 2020 to 1,040,842 Mcf/d.
Crude Equivalent Price Realization
For fourth-quarter 2021, the crude oil equivalent price increased to $55.27 per barrel from $24.63 in the prior-year period. Natural gas was sold at $6.31 per Mcf, up from $1.81 in the year-ago quarter. The average realized price for oil was $73.19 a barrel, up from $37.34 in the prior-year quarter.
Total Expenses
In fourth-quarter 2021, total operating expenses of $861.9 million declined from $869.3 million in the December-end quarter of 2020. However, total production costs increased to $114.1 million from $87.4 million in the year-ago quarter. Exploration costs for the reported quarter were $11.6 million compared with $3.1 million in the year-ago period. Transportation costs increased to $68.3 million from the year-ago level of $48.6 million.
Financials
For fourth-quarter 2021, the total capital expenditure was $585.7 million. It generated a free cash flow of $728.9 million in the reported quarter.
As of Dec 31, 2021, the company had total cash and cash equivalents of $20.9 million. It had long-term debt of $6,826.6 million (excluding current maturities). It had a debt-to-capitalization of 46.5%.
Outlook
For 2022, Continental Resources expects average oil production of 195,000-205,000 Bbls/d. Natural gas production is expected to be 1,040,000-1,140,000 Mcf/d. The upstream player announces its capital spending budget at $2.3 billion for the year.
Notably, the company plans to generate $5.2 billion of cash flow from operations and $2.9 billion of free cash flow in 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Continental Resources has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Continental Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.