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Coterra (CTRA) Q3 Earnings Beat on Higher Output, Lower Cost
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Oil and gas exploration and production firm Coterra Energy (CTRA - Free Report) reported third-quarter 2023 adjusted earnings per share of 50 cents, which beat the Zacks Consensus Estimate of 44 cents. The outperformance reflects strong production and lower cost.
However, the company’s bottom line plunged from the year-ago adjusted profit of $1.42 due to weaker oil and natural gas realizations.
Coterra Energy’s operating revenues of $1.4 billion missed the Zacks Consensus Estimate by $27 million and fell 46.2% from the year-ago figure of $2.5 billion.
Coterra Energy Inc. Price, Consensus and EPS Surprise
The average third-quarter daily production (comprising 72% natural gas) increased 4.5% from the year-ago level to 670.3 thousand barrels of oil equivalent (Mboe) and surpassed the Zacks Consensus Estimate of 644 Mboe. While natural gas volume for the period came in at 267.1 billion cubic feet/Bcf (up 3.4% year over year), oil output totaled 8.5 million barrels (MMBbls) — an improvement of 4.9%. The consensus mark called for 260 Bcf of natural gas and 8.39 MMBbls of crude.
The average sales price for crude during the third quarter was $80.80 per barrel, reflecting a 13.4% decrease from the prior-year realization of $93.35 and less than the consensus mark of $82. The average realized natural gas price was $1.80 per thousand cubic feet compared to $6.37 in the year-earlier period and $2.03 per the Zacks Consensus Estimate.
Costs & Expenses
The average unit cost in the quarter fell to $15.32 per barrels of oil equivalent (boe) from the year-ago quarter’s $17.45. This was mainly on account of a decline in unit operating cost, which dropped 13% year over year to $7.99 per boe. Furthermore, Coterra’s depreciation outlay decreased by 4.7% from the third quarter of 2022 on a per barrel basis.
Financial Position
Cash flow from operations went down 57.2% to $758 million, while Coterra’s cash capital expenditure for drilling and development totaled $556 million. The company’s free cash flow for the quarter was $250 million. It also executed $60 million in share repurchases during the period.
As of Sep 30, the company had $847 million in cash and cash equivalents. Coterra Energy had a long-term debt (including the current portion) of $2.2 billion, reflecting a debt-to-capitalization of 14.5%.
Guidance
Coterra Energy has maintained its budgeted capital spending between $2 billion and $2.2 billion this year. Meanwhile, the company sees a cash flow of approximately $3.5 billion and a free cash flow of around $1.3 billion.
The company is targeting an average daily production in the range of 655 Mboe to 665 Mboe. Further, Coterra expects oil volumes in the band of 94.5-95.5 thousand barrels per day while churning out 2,840-2,870 million cubic feet of natural gas.
Zacks Rank & Key Picks
Coterra Energy — a leading upstream oil and gas company — carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy sector might look at operators like Delek US Holdings (DK - Free Report) , EOG Resources (EOG - Free Report) and TechnipFMC plc (FTI - Free Report) . Each of these companies has a Zacks Rank of 2.
Delek US Holdings: DK beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters at an average of 34.2%.
Delek US Holdings is valued at around $1.6 billion. DK has seen its shares move down 22.8% in a year.
EOG Resources: EOG Resources beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. EOG has a trailing four-quarter earnings surprise of 9.2%, on average.
EOG Resources is valued at around $71.6 billion. EOG has seen its shares drop 16.5% in a year.
TechnipFMC: The 2023 Zacks Consensus Estimate for FTI indicates 1,667.7% year-over-year earnings per share growth. Over the past 60 days, TechnipFMC saw the Zacks Consensus Estimate for 2023 move up 6.8%.
TechnipFMC is valued at around $9.4 billion. FTI has seen its shares surge 75.3% in a year.
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Coterra (CTRA) Q3 Earnings Beat on Higher Output, Lower Cost
Oil and gas exploration and production firm Coterra Energy (CTRA - Free Report) reported third-quarter 2023 adjusted earnings per share of 50 cents, which beat the Zacks Consensus Estimate of 44 cents. The outperformance reflects strong production and lower cost.
However, the company’s bottom line plunged from the year-ago adjusted profit of $1.42 due to weaker oil and natural gas realizations.
Coterra Energy’s operating revenues of $1.4 billion missed the Zacks Consensus Estimate by $27 million and fell 46.2% from the year-ago figure of $2.5 billion.
Coterra Energy Inc. Price, Consensus and EPS Surprise
Coterra Energy Inc. price-consensus-eps-surprise-chart | Coterra Energy Inc. Quote
Production & Price Realizations
The average third-quarter daily production (comprising 72% natural gas) increased 4.5% from the year-ago level to 670.3 thousand barrels of oil equivalent (Mboe) and surpassed the Zacks Consensus Estimate of 644 Mboe. While natural gas volume for the period came in at 267.1 billion cubic feet/Bcf (up 3.4% year over year), oil output totaled 8.5 million barrels (MMBbls) — an improvement of 4.9%. The consensus mark called for 260 Bcf of natural gas and 8.39 MMBbls of crude.
The average sales price for crude during the third quarter was $80.80 per barrel, reflecting a 13.4% decrease from the prior-year realization of $93.35 and less than the consensus mark of $82. The average realized natural gas price was $1.80 per thousand cubic feet compared to $6.37 in the year-earlier period and $2.03 per the Zacks Consensus Estimate.
Costs & Expenses
The average unit cost in the quarter fell to $15.32 per barrels of oil equivalent (boe) from the year-ago quarter’s $17.45. This was mainly on account of a decline in unit operating cost, which dropped 13% year over year to $7.99 per boe. Furthermore, Coterra’s depreciation outlay decreased by 4.7% from the third quarter of 2022 on a per barrel basis.
Financial Position
Cash flow from operations went down 57.2% to $758 million, while Coterra’s cash capital expenditure for drilling and development totaled $556 million. The company’s free cash flow for the quarter was $250 million. It also executed $60 million in share repurchases during the period.
As of Sep 30, the company had $847 million in cash and cash equivalents. Coterra Energy had a long-term debt (including the current portion) of $2.2 billion, reflecting a debt-to-capitalization of 14.5%.
Guidance
Coterra Energy has maintained its budgeted capital spending between $2 billion and $2.2 billion this year. Meanwhile, the company sees a cash flow of approximately $3.5 billion and a free cash flow of around $1.3 billion.
The company is targeting an average daily production in the range of 655 Mboe to 665 Mboe. Further, Coterra expects oil volumes in the band of 94.5-95.5 thousand barrels per day while churning out 2,840-2,870 million cubic feet of natural gas.
Zacks Rank & Key Picks
Coterra Energy — a leading upstream oil and gas company — carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy sector might look at operators like Delek US Holdings (DK - Free Report) , EOG Resources (EOG - Free Report) and TechnipFMC plc (FTI - Free Report) . Each of these companies has a Zacks Rank of 2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Delek US Holdings: DK beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters at an average of 34.2%.
Delek US Holdings is valued at around $1.6 billion. DK has seen its shares move down 22.8% in a year.
EOG Resources: EOG Resources beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. EOG has a trailing four-quarter earnings surprise of 9.2%, on average.
EOG Resources is valued at around $71.6 billion. EOG has seen its shares drop 16.5% in a year.
TechnipFMC: The 2023 Zacks Consensus Estimate for FTI indicates 1,667.7% year-over-year earnings per share growth. Over the past 60 days, TechnipFMC saw the Zacks Consensus Estimate for 2023 move up 6.8%.
TechnipFMC is valued at around $9.4 billion. FTI has seen its shares surge 75.3% in a year.