It has been about a month since the last earnings report for Callon Petroleum . Shares have lost about 18.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Callon due for a breakout? 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.
Callon Q4 Earnings Miss Estimates, Revenues Beat
Callon reported fourth-quarter adjusted earnings of $3.36 per share, missing the Zacks Consensus Estimate of $3.44. The bottom line, however, surged from earnings of $2.66 per share reported a year ago.
Operating revenues of $704 million beat the Zacks Consensus Estimate of $617 million. The top line increased from the year-ago quarter’s $692 million.
Lower-than-expected quarterly earnings were driven by higher lease operating costs. This was offset partially by increased realized oil equivalent prices.
Production
In the fourth quarter, CPE’s net production volumes averaged 106,287 barrels of oil equivalent per day (Boe/d), down from the year-ago period’s 112,365 Boe/d. Production volumes increased in the Permian Basin, while the same in Eagle Ford declined from the year-ago quarter. Of the total fourth-quarter production, 62% was oil.
Callon’s oil production in the quarter was 6,092 thousand barrels (MBbls), down from the year-ago level of 6,566 MBbls. Natural gas production decreased to 10,543 million cubic feet (MMcf) from 11,273 MMcf. However, natural gas liquids (NGLs) production in the quarter under review was 1,930 MBbls, up from the year-ago figure of 1,893 MBbls.
Price Realizations (Without the Impacts of Cash-Settled Derivatives)
The average realized price per barrel of oil equivalent was $62.00. The figure increased from the year-ago quarter’s $61.22 a barrel. The average realized price for oil was $84.33 per barrel compared with $77.13 a year ago. The average realized price for natural gas was $4.06 per thousand cubic feet, down from $5.03. The average realized price per barrel for NGLs was $25.79, lower than the year-ago level of $36.86.
Total Expenses
Callon’s total operating expenses of $380.4 million increased from the year-ago level of $327.8 million.
Total lease operating costs increased to $74.1 million from the year-ago level of $73.5 million. Also, the company’s per-unit lease operating expenses increased to $7.58 per barrel of oil equivalent (Boe) in the reported quarter from $7.11 a year ago.
Capital Expenditure & Balance Sheet
The capital expenditure in the reported quarter was $238.8 million. Callon generated an adjusted free cash flow of $165.3 million, up from $123.6 million a year ago.
As of Dec 31, 2022, the company’s total cash and cash equivalents amounted to $3.4 million. The long-term debt totaled $2,241.3 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -14.97% due to these changes.
VGM Scores
Currently, Callon has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. 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 downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Callon has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Callon (CPE) Down 18.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Callon Petroleum . Shares have lost about 18.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Callon due for a breakout? 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.
Callon Q4 Earnings Miss Estimates, Revenues Beat
Callon reported fourth-quarter adjusted earnings of $3.36 per share, missing the Zacks Consensus Estimate of $3.44. The bottom line, however, surged from earnings of $2.66 per share reported a year ago.
Operating revenues of $704 million beat the Zacks Consensus Estimate of $617 million. The top line increased from the year-ago quarter’s $692 million.
Lower-than-expected quarterly earnings were driven by higher lease operating costs. This was offset partially by increased realized oil equivalent prices.
Production
In the fourth quarter, CPE’s net production volumes averaged 106,287 barrels of oil equivalent per day (Boe/d), down from the year-ago period’s 112,365 Boe/d. Production volumes increased in the Permian Basin, while the same in Eagle Ford declined from the year-ago quarter. Of the total fourth-quarter production, 62% was oil.
Callon’s oil production in the quarter was 6,092 thousand barrels (MBbls), down from the year-ago level of 6,566 MBbls. Natural gas production decreased to 10,543 million cubic feet (MMcf) from 11,273 MMcf. However, natural gas liquids (NGLs) production in the quarter under review was 1,930 MBbls, up from the year-ago figure of 1,893 MBbls.
Price Realizations (Without the Impacts of Cash-Settled Derivatives)
The average realized price per barrel of oil equivalent was $62.00. The figure increased from the year-ago quarter’s $61.22 a barrel. The average realized price for oil was $84.33 per barrel compared with $77.13 a year ago. The average realized price for natural gas was $4.06 per thousand cubic feet, down from $5.03. The average realized price per barrel for NGLs was $25.79, lower than the year-ago level of $36.86.
Total Expenses
Callon’s total operating expenses of $380.4 million increased from the year-ago level of $327.8 million.
Total lease operating costs increased to $74.1 million from the year-ago level of $73.5 million. Also, the company’s per-unit lease operating expenses increased to $7.58 per barrel of oil equivalent (Boe) in the reported quarter from $7.11 a year ago.
Capital Expenditure & Balance Sheet
The capital expenditure in the reported quarter was $238.8 million. Callon generated an adjusted free cash flow of $165.3 million, up from $123.6 million a year ago.
As of Dec 31, 2022, the company’s total cash and cash equivalents amounted to $3.4 million. The long-term debt totaled $2,241.3 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -14.97% due to these changes.
VGM Scores
Currently, Callon has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. 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 downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Callon has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.