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Why Is EQT Corporation (EQT) Up 0.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for EQT Corporation (EQT - Free Report) . Shares have added about 0.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is EQT Corporation 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.
EQT Corporation reported second-quarter adjusted loss from continuing operations of 17 cents per share, beating the Zacks Consensus Estimate of a loss of 27 cents. However, the bottom line declined significantly from the year-ago quarter’s adjusted earnings of 83 cents.
Adjusted operating revenues declined to $993 million from $1,612 million in the prior-year quarter. However, the top line also beat the Zacks Consensus Estimate of $965 million.
Better-than-expected quarterly results were driven by lower operating costs. However, declining realizations of commodity prices partially offset the positives.
Q2 Operations
Production
Sales volumes declined to 470.8 billion cubic feet equivalent (Bcfe) from the year-ago quarter’s 501.5 Bcfe. The reported figure also missed our estimated sales volume of 496.5 Bcfe. Natural gas sales volume was 449.7 Bcf in the second quarter, down from 476.7 Bcf. It was also lower than our estimate of 473.6 Bcfe. Total liquids sales volume was 3,530 thousand barrels (MBbls) compared with the year-ago period’s 4,132 MBbls and lower than our estimate of 3810 MBbls.
Commodity Price Realizations
The average realized price was $2.11 per thousand cubic feet of natural gas equivalent (Mcfe), down from the year-ago quarter’s $3.21 per Mcfe. The Average natural gas price, including cash-settled derivatives, was $2.03 per Mcf, which decreased year-over-year from $3.01. The natural gas sales price was $2.20 per Mcf in the second quarter, lower than the year-ago quarter’s $7.54. It came lower than our estimate for the same which was pinned at $2.26 per Mcf. Also, oil prices were $49.71 per barrel, down from $91.38.
Expenses
Total operating expenses were $1,053.7 million in the second quarter of 2023, which was lower than $1,165.6 million reported in the prior-year quarter.
Transmission expenses were 33 cents per Mcfe, up from the year-ago quarter of 30 cents. Lease operating expenses declined to 8 cents from 9 cents per Mcfe.
Cash Flows
EQT’s adjusted operating cash flow was $340.8 million in the quarter, down from $916.3 million a year ago. The reported figure came lower than our estimate of $390.9 million. Free cash flow in the quarter was negative $129.3 million, significantly down from $542.6 million.
Capex & Balance Sheet
Total capital expenditure amounted to $473.2 million in the second quarter, up from $376.3 million a year ago.
As of Mar 31, 2023, the company had $1,215.53 million in cash and cash equivalents. Net debt was $3,456.1 million.
Guidance
For 2023, EQT reiterated its guidance of total sales volumes of 1,900-2,000 Bcfe, the midpoint of which suggests an increase from $1,940 Bcfe reported in 2022. For the third quarter, total sales volumes are anticipated to be 475-525 Bcfe.
The company expects total per-unit operating costs of $1.30-$1.42 per Mcfe in 2023. Capital expenditure for the third quarter is projected in the range of $400-$450 million and $1.7-$1.9 billion for the year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -86.8% due to these changes.
VGM Scores
At this time, EQT Corporation has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, 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 D. 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. Notably, EQT Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is EQT Corporation (EQT) Up 0.6% Since Last Earnings Report?
It has been about a month since the last earnings report for EQT Corporation (EQT - Free Report) . Shares have added about 0.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is EQT Corporation 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.
EQT Corporation Q2 Earnings & Revenues Beat Estimates
EQT Corporation reported second-quarter adjusted loss from continuing operations of 17 cents per share, beating the Zacks Consensus Estimate of a loss of 27 cents. However, the bottom line declined significantly from the year-ago quarter’s adjusted earnings of 83 cents.
Adjusted operating revenues declined to $993 million from $1,612 million in the prior-year quarter. However, the top line also beat the Zacks Consensus Estimate of $965 million.
Better-than-expected quarterly results were driven by lower operating costs. However, declining realizations of commodity prices partially offset the positives.
Q2 Operations
Production
Sales volumes declined to 470.8 billion cubic feet equivalent (Bcfe) from the year-ago quarter’s 501.5 Bcfe. The reported figure also missed our estimated sales volume of 496.5 Bcfe. Natural gas sales volume was 449.7 Bcf in the second quarter, down from 476.7 Bcf. It was also lower than our estimate of 473.6 Bcfe. Total liquids sales volume was 3,530 thousand barrels (MBbls) compared with the year-ago period’s 4,132 MBbls and lower than our estimate of 3810 MBbls.
Commodity Price Realizations
The average realized price was $2.11 per thousand cubic feet of natural gas equivalent (Mcfe), down from the year-ago quarter’s $3.21 per Mcfe. The Average natural gas price, including cash-settled derivatives, was $2.03 per Mcf, which decreased year-over-year from $3.01. The natural gas sales price was $2.20 per Mcf in the second quarter, lower than the year-ago quarter’s $7.54. It came lower than our estimate for the same which was pinned at $2.26 per Mcf. Also, oil prices were $49.71 per barrel, down from $91.38.
Expenses
Total operating expenses were $1,053.7 million in the second quarter of 2023, which was lower than $1,165.6 million reported in the prior-year quarter.
Transmission expenses were 33 cents per Mcfe, up from the year-ago quarter of 30 cents. Lease operating expenses declined to 8 cents from 9 cents per Mcfe.
Cash Flows
EQT’s adjusted operating cash flow was $340.8 million in the quarter, down from $916.3 million a year ago. The reported figure came lower than our estimate of $390.9 million. Free cash flow in the quarter was negative $129.3 million, significantly down from $542.6 million.
Capex & Balance Sheet
Total capital expenditure amounted to $473.2 million in the second quarter, up from $376.3 million a year ago.
As of Mar 31, 2023, the company had $1,215.53 million in cash and cash equivalents. Net debt was $3,456.1 million.
Guidance
For 2023, EQT reiterated its guidance of total sales volumes of 1,900-2,000 Bcfe, the midpoint of which suggests an increase from $1,940 Bcfe reported in 2022. For the third quarter, total sales volumes are anticipated to be 475-525 Bcfe.
The company expects total per-unit operating costs of $1.30-$1.42 per Mcfe in 2023. Capital expenditure for the third quarter is projected in the range of $400-$450 million and $1.7-$1.9 billion for the year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -86.8% due to these changes.
VGM Scores
At this time, EQT Corporation has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, 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 D. 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. Notably, EQT Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.