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Continental (CLR) Stock Up Marginally Despite Q3 Earnings Miss
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Continental Resources, Inc. shares have gained marginally despite reporting lower-than-expected third-quarter 2022 results on Nov 2. The upward price movement can be attributed to the company’s strong cash generation capabilities.
The company reported third-quarter adjusted earnings of $2.88 per share, missing the Zacks Consensus Estimate of $2.98. However, the bottom line significantly improved from the year-ago quarter’s earnings of $1.20 per share.
Total quarterly revenues of $2,447 million missed the Zacks Consensus Estimate of $2,494 million. The top line improved from the year-ago quarter’s $1,341 million.
Lower-than-expected quarterly results can be primarily attributed to the higher operating and production expenses. The negatives were partially offset by higher oil-equivalent production volumes and commodity price realizations.
Continental Resources, Inc. Price, Consensus and EPS Surprise
Production averaged 414,441 barrels of oil equivalent per day (Boe/d) in the reported quarter (48.4% oil) versus 331,407 Boe/d in the year-ago period. Production volumes increased primarily due to higher output from the Powder River and Permian Basins.
Oil production in the reported quarter was 200,464 barrels per day (Bbls/d), up from 157,153 Bbls/d a year ago. Natural gas production increased to 1,283,865 cubic feet per day (Mcf/d) from 1,045,521 Mcf/d recorded in third-quarter 2021.
Crude-Equivalent Price Realization
In third-quarter 2022, the crude oil-equivalent net sales price, excluding the effect of derivatives, increased to $69.91 per barrel from $46.07 in the prior-year period. Natural gas was sold at $8.56 per Mcf, up from $4.62 in the year-ago quarter. The average realized price for oil was $89.46 a barrel, up from $66.48 in the prior-year quarter.
Total Expenses
In the third quarter, total operating expenses of $1,037.1 million increased from $795.7 million in the September-end quarter of 2021. Total production costs increased to $166.3 million from $103.2 million. Exploration expenses in the reported quarter were $2.8 million compared with $2.5 million in the year-ago period. Also, transportation, gathering, processing and compression costs increased to $85.7 million from $54 million.
Financials
In third-quarter 2022, the total capital expenditure was $820.2 million. It generated a free cash flow of $1,005.8 million in the reported quarter.
As of Sept 30, 2022, the company had total cash and cash equivalents of $1.81 billion. It had long-term debt of $5,663.5 million (excluding current maturities).
Outlook
For 2022, Continental reiterated its average oil production guidance at 200,000-210,000 Bbls/d. Natural gas production is expected to be 1,100,000-1,200,000 Mcf/d.
Continental expects its capital spending budget for this year to be $2.6-$2.7 billion.
Zacks Rank & Stocks to Consider
Continental currently carries a Zacks Rank #3 (Hold).
DCP Midstream, LP reported third-quarter adjusted earnings of $1.50 per unit, beating the Zacks Consensus Estimate of $1.05. The outperformance resulted from increased NGL pipeline throughput.
DCP Midstream is expected to see an earnings surge of 167.3% in 2022. The company currently has a Zacks Style Score of A for Growth, and B for Value and Momentum. DCP generated an excess free cash flow of $52 million in the reported quarter.
Marathon Petroleum Corporation (MPC - Free Report) reported third-quarter 2022 adjusted earnings per share of $7.81, comfortably beating the Zacks Consensus Estimate of $6.80. The bottom line was favorably impacted by the stronger-than-expected performance of its Refining & Marketing segment.
Marathon Petroleum is expected to see an earnings surge of 944% in 2022. In October, Marathon Petroleum completed its target to buy back $15 billion in common stock. MPC has a remaining authorization of $5 billion with no expiration date.
Patterson-UTI Energy (PTEN - Free Report) reported a third-quarter 2022 adjusted net profit of 28 cents per share, beating the Zacks Consensus Estimate of a profit of 19 cents. The outperformance was driven by solid segmental performances.
Patterson-UTI is expected to see an earnings surge of 128% in 2022. The company doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. The dividend will be paid out on Dec 15, 2022, to shareholders of record as of Dec 1, 2022. PTEN also increased its share repurchase authorization to $300 million.
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Continental (CLR) Stock Up Marginally Despite Q3 Earnings Miss
Continental Resources, Inc. shares have gained marginally despite reporting lower-than-expected third-quarter 2022 results on Nov 2. The upward price movement can be attributed to the company’s strong cash generation capabilities.
The company reported third-quarter adjusted earnings of $2.88 per share, missing the Zacks Consensus Estimate of $2.98. However, the bottom line significantly improved from the year-ago quarter’s earnings of $1.20 per share.
Total quarterly revenues of $2,447 million missed the Zacks Consensus Estimate of $2,494 million. The top line improved from the year-ago quarter’s $1,341 million.
Lower-than-expected quarterly results can be primarily attributed to the higher operating and production expenses. The negatives were partially offset by higher oil-equivalent production volumes and commodity price realizations.
Continental Resources, Inc. Price, Consensus and EPS Surprise
Continental Resources, Inc. price-consensus-eps-surprise-chart | Continental Resources, Inc. Quote
Oil Production
Production averaged 414,441 barrels of oil equivalent per day (Boe/d) in the reported quarter (48.4% oil) versus 331,407 Boe/d in the year-ago period. Production volumes increased primarily due to higher output from the Powder River and Permian Basins.
Oil production in the reported quarter was 200,464 barrels per day (Bbls/d), up from 157,153 Bbls/d a year ago. Natural gas production increased to 1,283,865 cubic feet per day (Mcf/d) from 1,045,521 Mcf/d recorded in third-quarter 2021.
Crude-Equivalent Price Realization
In third-quarter 2022, the crude oil-equivalent net sales price, excluding the effect of derivatives, increased to $69.91 per barrel from $46.07 in the prior-year period. Natural gas was sold at $8.56 per Mcf, up from $4.62 in the year-ago quarter. The average realized price for oil was $89.46 a barrel, up from $66.48 in the prior-year quarter.
Total Expenses
In the third quarter, total operating expenses of $1,037.1 million increased from $795.7 million in the September-end quarter of 2021. Total production costs increased to $166.3 million from $103.2 million. Exploration expenses in the reported quarter were $2.8 million compared with $2.5 million in the year-ago period. Also, transportation, gathering, processing and compression costs increased to $85.7 million from $54 million.
Financials
In third-quarter 2022, the total capital expenditure was $820.2 million. It generated a free cash flow of $1,005.8 million in the reported quarter.
As of Sept 30, 2022, the company had total cash and cash equivalents of $1.81 billion. It had long-term debt of $5,663.5 million (excluding current maturities).
Outlook
For 2022, Continental reiterated its average oil production guidance at 200,000-210,000 Bbls/d. Natural gas production is expected to be 1,100,000-1,200,000 Mcf/d.
Continental expects its capital spending budget for this year to be $2.6-$2.7 billion.
Zacks Rank & Stocks to Consider
Continental currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DCP Midstream, LP reported third-quarter adjusted earnings of $1.50 per unit, beating the Zacks Consensus Estimate of $1.05. The outperformance resulted from increased NGL pipeline throughput.
DCP Midstream is expected to see an earnings surge of 167.3% in 2022. The company currently has a Zacks Style Score of A for Growth, and B for Value and Momentum. DCP generated an excess free cash flow of $52 million in the reported quarter.
Marathon Petroleum Corporation (MPC - Free Report) reported third-quarter 2022 adjusted earnings per share of $7.81, comfortably beating the Zacks Consensus Estimate of $6.80. The bottom line was favorably impacted by the stronger-than-expected performance of its Refining & Marketing segment.
Marathon Petroleum is expected to see an earnings surge of 944% in 2022. In October, Marathon Petroleum completed its target to buy back $15 billion in common stock. MPC has a remaining authorization of $5 billion with no expiration date.
Patterson-UTI Energy (PTEN - Free Report) reported a third-quarter 2022 adjusted net profit of 28 cents per share, beating the Zacks Consensus Estimate of a profit of 19 cents. The outperformance was driven by solid segmental performances.
Patterson-UTI is expected to see an earnings surge of 128% in 2022. The company doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. The dividend will be paid out on Dec 15, 2022, to shareholders of record as of Dec 1, 2022. PTEN also increased its share repurchase authorization to $300 million.