A month has gone by since the last earnings report for PDC Energy (
PDCE Quick Quote PDCE - Free Report) . Shares have added about 13.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PDC Energy 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.
PDC Energy Q1 Earnings Beat Estimate
PDC Energy reported adjusted earnings per share of $3.66, comfortably ahead of the Zacks Consensus Estimate of $3.18. The company had reported a profit of $1.41 in the year-ago quarter. The outperformance can be primarily attributed to better-than-anticipated production volumes and higher commodity prices. Precisely, the Colorado-focused company’s output of 17,924 thousand barrels of oil equivalent (MBoe) surpassed the Zacks Consensus Estimate of 17,600 MBoe.
Meanwhile, PDC Energy recorded total revenues of $316.4 million, higher than the year-ago level of $286 million but well below the consensus mark of $739 million due to losses from commodity price risk management. The company is using the excess cash from a supportive environment to reward them with dividends and buybacks. As part of that, PDCE’s board of directors declared a quarterly cash dividend of 25 cents per share to its common shareholders. In fact, PDC Energy returned $110 million to its shareholders during the first quarter through dividends and buybacks. Production & Prices
For the first quarter of 2022, PDC Energy’s production totaled 17,924 MBoe (60% liquids), reflecting an increase of around 13.9% from 15,740 MBoe a year ago. Of the aggregate output, 15,400 MBoe (or some 86%) came from Wattenberg Field and the rest from Delaware Basin.
The average realized natural gas price increased from $2.63 per thousand cubic feet (Mcf) in the year-ago quarter to $3.78. PDC Energy sold NGLs at an average price of $34.70 per barrel (Bbls) compared to $21.19 a year ago. Meanwhile, the average oil price realization came in at $93.93 per barrel, 66.7% higher than $56.34 in the year-ago period. Overall, PDC Energy fetched $49.23 per MBoe compared with $29.74 a year ago. Capital Expenditure & Balance Sheet
The energy explorer, which recently completed the previously announced acquisition of privately-held Great Western Petroleum LLC, shelled out $187 million in the form of oil and gas capital investments. As of Mar 31, PDC Energy had approximately $171.2 million in cash and cash equivalents, and $942.6 million in long-term debt, representing a debt-to-capitalization of 25.4%. During the quarter, the company returned approximately $110 million through dividends and share repurchases.
For 2022, PDC Energy expects to pump 225,000-240,000 Boe per day of hydrocarbon. It also gave its oil production expectation of 74,000-81,000 Boe per day. The Zacks Rank #1 (Strong Buy) company forecast a capital spending budget of $950 million to $1 billion. It has committed to return at least 60% of free cash flow to its shareholders in 2022 and beyond.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 18.58% due to these changes.
At this time, PDC Energy 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.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise PDC Energy has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
PDC Energy belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, SM Energy (
SM Quick Quote SM - Free Report) , has gained 28.5% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.
SM Energy reported revenues of $859.78 million in the last reported quarter, representing a year-over-year change of +93.7%. EPS of $1.98 for the same period compares with -$0.05 a year ago.
SM Energy is expected to post earnings of $2.20 per share for the current quarter, representing a year-over-year change of +21900%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for SM Energy. Also, the stock has a VGM Score of A.