It has been about a month since the last earnings report for Diamondback Energy (FANG Quick QuoteFANG - Free Report) . Shares have added about 11.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Diamondback 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 drivers.

Diamondback Q1 Earnings and Revenues Top Estimates

Diamondback reported first-quarter 2022 adjusted earnings per share of $5.20, beating the Zacks Consensus Estimate of $4.74, significantly more than the year-earlier period’s profit of $2.30.

The outperformance can be attributed to the surge in energy prices in the first quarter, which lead to higher oil, natural gas and natural gas liquid sales. Diamondback’s average first-quarter output came in at 381,378 barrels of oil equivalent per day (BOE/d), ahead of the consensus mark of 374,957 BOE/d.

Revenues of $2.41 billion outpaced the Zacks Consensus Estimate by approximately 25% and surged 103.4% from the year-ago quarter’s sales of $1.18 billion.

In good news for investors, FANG raised its regular quarterly payout by almost 17% to 70 cents a share and also declared a variable dividend of $2.35, bringing the total distribution to $3.05. The payout will be made on May 23. The company also executed $6.7 million of share repurchases in the first quarter of 2022 at $117.34 apiece.

Production & Realized Prices

Diamondback’s production of oil and natural gas averaged 381,378 BOE/d, which comprised about 58.4% oil. The figure rose 24% from the year-ago quarter and also surpassed the Zacks Consensus Estimate of 374,957 BOE/d. While the crude output was up 21% year over year, natural gas volumes improved by about 25% year over year.

The average realized oil price in the first quarter was $97.03 per barrel, 70.4% higher than the year-ago realization of $56.94 and also more than the consensus mark of $91. Meanwhile, the average realized natural gas price jumped to $3.61 per thousand cubic feet (Mcf) from $3.05 in the year-ago period but missed the Zacks Consensus Estimate of $4.02. Overall, the company fetched $69.60 per barrel compared with $42.36 a year ago.

Costs & Financial Position

Diamondback’s first-quarter cash operating cost was $11.36 per barrel of oil equivalent (BOE), up 41% from the prior-year quarter. Lease operating expenses were $4.34 per BOE, compared with $3.69 in the first quarter of 2021. FANG’s production taxes rose 73% year over year to $4.69 per BOE. Gathering and transportation expenses increased in the first quarter of 2022 to $1.72 per BOE from $1.12 in the first quarter of 2021.

Diamondback spent $437 million on capital expenditure, $374 million on drilling and completion, $44 million on infrastructure and $19 million on midstream. The company booked $974 million of free cash flows in the first quarter.

As of Mar 31, the Permian-focused operator had approximately $149 million in cash and cash equivalents and $5.8 billion in long-term debt, representing a debt-to-capitalization of 29.5%.

Guidance

For 2022, Diamondback maintained its total net production guidance in the range of 369,000-376,000 BOE/d and also maintained that its oil volumes are likely to be in the 218,000-222,000 barrels per day band. The company forecast the capital spending budget between $1.75 billion and $1.9 billion. In the second quarter of 2022, the company expects capital spending between $435 and $475 million.

As a consequence of the rise in commodity prices, FANG increased its expected cash tax rate to 10-15% of the pre-tax income from the previous 6-11%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

Currently, Diamondback has a great Growth Score of A, a grade with the same score on the momentum front. 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 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 looks promising. It comes with little surprise Diamondback has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Diamondback belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, CNX Resources Corporation. (CNX Quick QuoteCNX - Free Report) , has gained 5.2% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

CNX Resources Corporation. reported revenues of $474 million in the last reported quarter, representing a year-over-year change of +0.2%. EPS of $0.79 for the same period compares with $0.36 a year ago.

For the current quarter, CNX Resources Corporation. is expected to post earnings of $0.71 per share, indicating a change of +294.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +12.1% over the last 30 days.

CNX Resources Corporation. has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.