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Here's Why Diamondback (FANG) Stumbled Post Q3 Earnings
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The stock of U.S. energy operator Diamondback Energy (FANG - Free Report) has lost 8.3% since its third-quarter earnings announcement on Nov 7. The negative response could be attributed to the company’s earnings miss and production coming in less than projections.
What Did Diamondback Energy’s Earnings Unveil?
Diamondback Energy reported third-quarter 2022 adjusted earnings per share of $6.48, lagging the Zacks Consensus Estimate of $6.51. The underperformance reflects a lower-than-expected oil price, to go with higher expenses.
However, FANG’s bottom line was significantly above the year-earlier quarter’s adjusted profit of $2.94 per share, backed by the positive effects of surging natural gas realizations.
Revenues of $2.4 billion outpaced the Zacks Consensus Estimate by 2.3% and increased 27.6% from the year-ago quarter’s sales of $1.9 billion.
In more news for investors, the company is using the excess cash from a supportive environment to reward them with dividends and buybacks. As part of that, FANG’s board of directors declared a quarterly cash dividend of 75 cents per share to its common shareholders of record on Nov 17. The payout will be made on Nov 25. In addition to the regular dividend, FANG declared a special dividend of $1.51 per share.
The company also executed $472 million of share repurchases during the third quarter of 2022 at $120.50 apiece.
Diamondback Energy, Inc. Price, Consensus and EPS Surprise
FANG’s production of oil and natural gas averaged 390,630 barrels of oil equivalent per day (BOE/d), which comprises 57% oil. The figure fell 3.4% from the year-ago quarter but surpassed the Zacks Consensus Estimate of 374,515 BOE/d. While crude output was down 6.4% year over year, natural gas volumes edged up 0.5% for the third quarter of 2021.
The average realized oil price during the most recent quarter was $89.79 per barrel, 31.5% higher than the year-ago realization of $68.27 but below the consensus mark of $94. Meanwhile, the average realized natural gas price jumped to $6.46 per thousand cubic feet (Mcf) from $3.34 in the year-ago period and beat the Zacks Consensus Estimate of $5.57. Overall, the company fetched $67.25 per barrel compared with $51 a year ago.
Costs & Financial Position
Diamondback’s third-quarter cash operating cost was $11.97 per barrel of oil equivalent (BOE), up 20.1% from the prior-year quarter. Lease operating expense was $5.09 per BOE compared with $4.19 in the third quarter of 2021. FANG’s production taxes shot up 30.3% year over year to $4.34 per BOE. Gathering and transportation expenses increased in the third quarter of 2022 to $1.98 per BOE from $1.80 during the corresponding period of 2021.
Diamondback spent $491 million in capital expenditure — $422 million on drilling and completion, $42 million on infrastructure, environment and $27 million on midstream. The company booked $1.2 billion of free cash flows in the third quarter.
As of Sep 30, the Permian-focused operator had approximately $27 million in cash and cash equivalents, and $5.3 billion in long-term debt, representing a debt-to-capitalization of 26.9%.
Guidance
In 2022, FANG said it looks to pump 385,000-386,000 BOE/d of hydrocarbon. Of this, oil volumes are likely to be 223,000-224,000 barrels per day. The company forecast a capital spending budget between $1.935 billion and $1.950 billion. Finally, stressing on its shareholder return program, Diamondback has committed to return half of the free cash flow through dividends and buybacks.
Zacks Rank & Stock Picks
Diamondback currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are HF Sinclair (DINO - Free Report) , Helmerich & Payne (HP - Free Report) and Halliburton (HAL - Free Report) , each carrying a Zacks Rank #1 (Strong Buy), currently.
HF Sinclair: HF Sinclair is valued at some $12.8 billion. The Zacks Consensus Estimate for DINO’s 2022 earnings has been revised 14.3% upward over the past 60 days.
HF Sinclair, headquartered in Dallas, TX, delivered a 9.1% beat in Q3. DINO shares have surged 90.2% in a year.
Helmerich & Payne: HP beat the Zacks Consensus Estimate for earnings in three of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 124.2%, on average.
Helmerich & Payne is valued at around $5.7 billion. HP has seen its shares gain 100.3% in a year.
Halliburton: Halliburton is valued at some $33.3 billion. The Zacks Consensus Estimate for HAL’s 2022 earnings has been revised 4% upward over the past 60 days.
Halliburton, headquartered in Houston, TX, has a trailing four-quarter earnings surprise of roughly 5.5%, on average. HAL shares have gained 57.3% in a year.
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Here's Why Diamondback (FANG) Stumbled Post Q3 Earnings
The stock of U.S. energy operator Diamondback Energy (FANG - Free Report) has lost 8.3% since its third-quarter earnings announcement on Nov 7. The negative response could be attributed to the company’s earnings miss and production coming in less than projections.
What Did Diamondback Energy’s Earnings Unveil?
Diamondback Energy reported third-quarter 2022 adjusted earnings per share of $6.48, lagging the Zacks Consensus Estimate of $6.51. The underperformance reflects a lower-than-expected oil price, to go with higher expenses.
However, FANG’s bottom line was significantly above the year-earlier quarter’s adjusted profit of $2.94 per share, backed by the positive effects of surging natural gas realizations.
Revenues of $2.4 billion outpaced the Zacks Consensus Estimate by 2.3% and increased 27.6% from the year-ago quarter’s sales of $1.9 billion.
In more news for investors, the company is using the excess cash from a supportive environment to reward them with dividends and buybacks. As part of that, FANG’s board of directors declared a quarterly cash dividend of 75 cents per share to its common shareholders of record on Nov 17. The payout will be made on Nov 25. In addition to the regular dividend, FANG declared a special dividend of $1.51 per share.
The company also executed $472 million of share repurchases during the third quarter of 2022 at $120.50 apiece.
Diamondback Energy, Inc. Price, Consensus and EPS Surprise
Diamondback Energy, Inc. price-consensus-eps-surprise-chart | Diamondback Energy, Inc. Quote
Production & Realized Prices
FANG’s production of oil and natural gas averaged 390,630 barrels of oil equivalent per day (BOE/d), which comprises 57% oil. The figure fell 3.4% from the year-ago quarter but surpassed the Zacks Consensus Estimate of 374,515 BOE/d. While crude output was down 6.4% year over year, natural gas volumes edged up 0.5% for the third quarter of 2021.
The average realized oil price during the most recent quarter was $89.79 per barrel, 31.5% higher than the year-ago realization of $68.27 but below the consensus mark of $94. Meanwhile, the average realized natural gas price jumped to $6.46 per thousand cubic feet (Mcf) from $3.34 in the year-ago period and beat the Zacks Consensus Estimate of $5.57. Overall, the company fetched $67.25 per barrel compared with $51 a year ago.
Costs & Financial Position
Diamondback’s third-quarter cash operating cost was $11.97 per barrel of oil equivalent (BOE), up 20.1% from the prior-year quarter. Lease operating expense was $5.09 per BOE compared with $4.19 in the third quarter of 2021. FANG’s production taxes shot up 30.3% year over year to $4.34 per BOE. Gathering and transportation expenses increased in the third quarter of 2022 to $1.98 per BOE from $1.80 during the corresponding period of 2021.
Diamondback spent $491 million in capital expenditure — $422 million on drilling and completion, $42 million on infrastructure, environment and $27 million on midstream. The company booked $1.2 billion of free cash flows in the third quarter.
As of Sep 30, the Permian-focused operator had approximately $27 million in cash and cash equivalents, and $5.3 billion in long-term debt, representing a debt-to-capitalization of 26.9%.
Guidance
In 2022, FANG said it looks to pump 385,000-386,000 BOE/d of hydrocarbon. Of this, oil volumes are likely to be 223,000-224,000 barrels per day. The company forecast a capital spending budget between $1.935 billion and $1.950 billion. Finally, stressing on its shareholder return program, Diamondback has committed to return half of the free cash flow through dividends and buybacks.
Zacks Rank & Stock Picks
Diamondback currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are HF Sinclair (DINO - Free Report) , Helmerich & Payne (HP - Free Report) and Halliburton (HAL - Free Report) , each carrying a Zacks Rank #1 (Strong Buy), currently.
You can see the complete list of today’s Zacks #1 Rank stocks here.
HF Sinclair: HF Sinclair is valued at some $12.8 billion. The Zacks Consensus Estimate for DINO’s 2022 earnings has been revised 14.3% upward over the past 60 days.
HF Sinclair, headquartered in Dallas, TX, delivered a 9.1% beat in Q3. DINO shares have surged 90.2% in a year.
Helmerich & Payne: HP beat the Zacks Consensus Estimate for earnings in three of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 124.2%, on average.
Helmerich & Payne is valued at around $5.7 billion. HP has seen its shares gain 100.3% in a year.
Halliburton: Halliburton is valued at some $33.3 billion. The Zacks Consensus Estimate for HAL’s 2022 earnings has been revised 4% upward over the past 60 days.
Halliburton, headquartered in Houston, TX, has a trailing four-quarter earnings surprise of roughly 5.5%, on average. HAL shares have gained 57.3% in a year.