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Why Is Hess (HES) Up 1.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Hess (HES - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hess due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Hess Beats on Q2 Earnings Estimate, Revenues Miss
Hess reported second-quarter 2023 earnings per share of 65 cents, beating the Zacks Consensus Estimate of 57 cents. However, the bottom line significantly declined from the year-ago quarter’s $2.15 per share.
Total quarterly revenues dipped to $2,320 million from $2,988 million a year ago. The top line also missed the Zacks Consensus Estimate of $2,408 million.
Better-than-expected quarterly earnings were driven by higher oil-equivalent production volumes. The positives were partially offset by lower realizations of commodity prices.
Operational Update
Exploration and Production:
For the quarter under review, the Exploration and Production business has reported adjusted earnings of $237 million, declining from $723 million a year ago. The business was negatively impacted by a dip in realized commodity prices.
Quarterly hydrocarbon production was 387 thousand barrels of oil equivalent per day (MBoe/d), up from 322 MBoe/d in the year-ago period primarily due to higher production in Guyana and the Bakken.
Crude oil production increased from 176 thousand barrels per day (MBbls/d) in second-quarter 2022 to 216 MBbls/d in the quarter under review. Natural gas liquid production totaled 69 MBbls/d, up from 49 MBbls/d in the prior-year quarter. Also, natural gas production was 610 thousand cubic feet per day (Mcf/d), up from 580 Mcf/d a year ago.
Worldwide crude oil realization per barrel of $73.74 (excluding the impacts of hedging) significantly declined from $109.51 in the year-ago period. Also, worldwide natural gas prices fell to $3.82 per Mcf from the year-ago figure of $6.45. The average worldwide natural gas liquids’ selling price declined to $17.95 per barrel from $40.92 a year ago.
Midstream:
From the midstream business, the company generated adjusted net earnings of $62 million, down from $65 million a year ago.
Operating Expenses
Operating expenses for the second quarter totaled $454 million versus the year-ago level of $356 million. Exploration expenses increased to $99 million from $33 million in the year-ago period. However, marketing costs declined to $547 million from $843 million a year ago.
Total costs and expenses increased to $1,955 million for the quarter from $1,906 million a year ago.
Financials
Net cash provided by operating activities was $974 million for the second quarter. Hess’ capital expenditure for exploration and production activities totaled $933 million.
As of Jun 30, 2023, the company had $2,226 million in cash and cash equivalents. Its long-term debt was $8,459 million at the second-quarter end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, Hess has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Hess 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 Hess (HES) Up 1.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Hess (HES - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hess due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Hess Beats on Q2 Earnings Estimate, Revenues Miss
Hess reported second-quarter 2023 earnings per share of 65 cents, beating the Zacks Consensus Estimate of 57 cents. However, the bottom line significantly declined from the year-ago quarter’s $2.15 per share.
Total quarterly revenues dipped to $2,320 million from $2,988 million a year ago. The top line also missed the Zacks Consensus Estimate of $2,408 million.
Better-than-expected quarterly earnings were driven by higher oil-equivalent production volumes. The positives were partially offset by lower realizations of commodity prices.
Operational Update
Exploration and Production:
For the quarter under review, the Exploration and Production business has reported adjusted earnings of $237 million, declining from $723 million a year ago. The business was negatively impacted by a dip in realized commodity prices.
Quarterly hydrocarbon production was 387 thousand barrels of oil equivalent per day (MBoe/d), up from 322 MBoe/d in the year-ago period primarily due to higher production in Guyana and the Bakken.
Crude oil production increased from 176 thousand barrels per day (MBbls/d) in second-quarter 2022 to 216 MBbls/d in the quarter under review. Natural gas liquid production totaled 69 MBbls/d, up from 49 MBbls/d in the prior-year quarter. Also, natural gas production was 610 thousand cubic feet per day (Mcf/d), up from 580 Mcf/d a year ago.
Worldwide crude oil realization per barrel of $73.74 (excluding the impacts of hedging) significantly declined from $109.51 in the year-ago period. Also, worldwide natural gas prices fell to $3.82 per Mcf from the year-ago figure of $6.45. The average worldwide natural gas liquids’ selling price declined to $17.95 per barrel from $40.92 a year ago.
Midstream:
From the midstream business, the company generated adjusted net earnings of $62 million, down from $65 million a year ago.
Operating Expenses
Operating expenses for the second quarter totaled $454 million versus the year-ago level of $356 million. Exploration expenses increased to $99 million from $33 million in the year-ago period. However, marketing costs declined to $547 million from $843 million a year ago.
Total costs and expenses increased to $1,955 million for the quarter from $1,906 million a year ago.
Financials
Net cash provided by operating activities was $974 million for the second quarter. Hess’ capital expenditure for exploration and production activities totaled $933 million.
As of Jun 30, 2023, the company had $2,226 million in cash and cash equivalents. Its long-term debt was $8,459 million at the second-quarter end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, Hess has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Hess has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.