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W&T (WTI) Down 13.1% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for W&T Offshore (WTI - Free Report) . Shares have lost about 13.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is W&T 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.
W&T Offshore Q3 Earnings Lag Estimates, Revenues Fall Y/Y
W&T Offshore, Inc. reported third-quarter 2023 adjusted earnings (excluding one-time items) of 1 cent per share, which missed the Zacks Consensus Estimate of 4 cents. The bottom line also deteriorated from the year-ago quarter’s level of 33 cents.
Total quarterly revenues of $142.4 million beat the Zacks Consensus Estimate of $136 million. However, the top line declined from $266 million reported in the prior-year quarter.
Lower oil equivalent production, rising expenses and lower commodity price realizations led to weak quarterly earnings.
Production Statistics
The total production averaged 35.9 thousand barrels of oil equivalent per day (MBoe/d), down from the year-ago quarter’s level of 41.5 MBoe/d. Our estimate for the same was pinned at 35.7 MBoe/d.
Oil production totaled 1,227 thousand barrels (MBbls), down from the year-ago level of 1,447 MBbls. Natural gas liquids output totaled 348 MBbls, lower than 454 MBbls a year ago. The figure also missed our estimate of 357 MBbls.
Natural gas production of 10,359 million cubic feet (MMcf) was lower than 11,499 MMcf recorded in the year-earlier period. The figure also missed our estimate of 10,363 MMcf.
Realized Commodity Prices
The average realized price for oil in the third quarter was $81.77 a barrel, lower than the year-ago level of $90.23. Our estimate for the same was pegged at $76.43. The average realized price of NGL declined to $21.31 per barrel from $37.17 in the prior year quarter. The figure also missed our estimate of $28.07 per barrel.
The average realized price of natural gas in the September quarter was $3.14 per thousand cubic feet, down from $9.89 in the comparable period of 2022. The average realized price for oil-equivalent output decreased to $42.48 per barrel from $68.39.
Operating Expenses
Lease operating expenses rose to $18.72 per Boe in the third quarter from $15.46 a year ago. The reported figure came in higher than our estimate of $18.39 per Boe. Also, general and administrative expenses increased marginally to $6.05 per Boe from $6.04, higher than our estimate of $5.75.
Cash Flow
Net cash from operations in the third quarter totaled $30 million, down from $89.1 million recorded in the year-ago period.
Free cash flow in the reported quarter declined to $25.4 million from $71.1 million in the year-earlier quarter.
Capital Spending & Balance Sheet
W&T Offshore spent $8 million in capital through the September quarter on oil and gas resources and equipment.
As of Sep 30, 2023, the company’s cash and cash equivalents were $149 million. Its net long-term debt in the quarter amounted to $367.1 million. The current portion of the long-term debt is $30 million.
Guidance
For the fourth quarter of this year, W&T Offshore projects production in the band of 3,147-3,482 MBoe. For 2023, WTI reiterated its production guidance of 12,150-13,430 MBoe. Lease operating expenses are anticipated to be in the range of $61-$68 million and $240-$260 million for the fourth quarter and full-year 2023, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -41.18% due to these changes.
VGM Scores
At this time, W&T has a subpar Growth Score of D, though it is lagging a bit 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 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, W&T has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
W&T is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Viper Energy Partners (VNOM - Free Report) , a stock from the same industry, has gained 1.1%. The company reported its results for the quarter ended September 2023 more than a month ago.
Viper Energy reported revenues of $293.24 million in the last reported quarter, representing a year-over-year change of +32.3%. EPS of $1.10 for the same period compares with $0.98 a year ago.
Viper Energy is expected to post earnings of $0.51 per share for the current quarter, representing a year-over-year change of +82.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.6%.
Viper Energy has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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W&T (WTI) Down 13.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for W&T Offshore (WTI - Free Report) . Shares have lost about 13.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is W&T 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.
W&T Offshore Q3 Earnings Lag Estimates, Revenues Fall Y/Y
W&T Offshore, Inc. reported third-quarter 2023 adjusted earnings (excluding one-time items) of 1 cent per share, which missed the Zacks Consensus Estimate of 4 cents. The bottom line also deteriorated from the year-ago quarter’s level of 33 cents.
Total quarterly revenues of $142.4 million beat the Zacks Consensus Estimate of $136 million. However, the top line declined from $266 million reported in the prior-year quarter.
Lower oil equivalent production, rising expenses and lower commodity price realizations led to weak quarterly earnings.
Production Statistics
The total production averaged 35.9 thousand barrels of oil equivalent per day (MBoe/d), down from the year-ago quarter’s level of 41.5 MBoe/d. Our estimate for the same was pinned at 35.7 MBoe/d.
Oil production totaled 1,227 thousand barrels (MBbls), down from the year-ago level of 1,447 MBbls. Natural gas liquids output totaled 348 MBbls, lower than 454 MBbls a year ago. The figure also missed our estimate of 357 MBbls.
Natural gas production of 10,359 million cubic feet (MMcf) was lower than 11,499 MMcf recorded in the year-earlier period. The figure also missed our estimate of 10,363 MMcf.
Realized Commodity Prices
The average realized price for oil in the third quarter was $81.77 a barrel, lower than the year-ago level of $90.23. Our estimate for the same was pegged at $76.43. The average realized price of NGL declined to $21.31 per barrel from $37.17 in the prior year quarter. The figure also missed our estimate of $28.07 per barrel.
The average realized price of natural gas in the September quarter was $3.14 per thousand cubic feet, down from $9.89 in the comparable period of 2022. The average realized price for oil-equivalent output decreased to $42.48 per barrel from $68.39.
Operating Expenses
Lease operating expenses rose to $18.72 per Boe in the third quarter from $15.46 a year ago. The reported figure came in higher than our estimate of $18.39 per Boe. Also, general and administrative expenses increased marginally to $6.05 per Boe from $6.04, higher than our estimate of $5.75.
Cash Flow
Net cash from operations in the third quarter totaled $30 million, down from $89.1 million recorded in the year-ago period.
Free cash flow in the reported quarter declined to $25.4 million from $71.1 million in the year-earlier quarter.
Capital Spending & Balance Sheet
W&T Offshore spent $8 million in capital through the September quarter on oil and gas resources and equipment.
As of Sep 30, 2023, the company’s cash and cash equivalents were $149 million. Its net long-term debt in the quarter amounted to $367.1 million. The current portion of the long-term debt is $30 million.
Guidance
For the fourth quarter of this year, W&T Offshore projects production in the band of 3,147-3,482 MBoe. For 2023, WTI reiterated its production guidance of 12,150-13,430 MBoe. Lease operating expenses are anticipated to be in the range of $61-$68 million and $240-$260 million for the fourth quarter and full-year 2023, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -41.18% due to these changes.
VGM Scores
At this time, W&T has a subpar Growth Score of D, though it is lagging a bit 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 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, W&T has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
W&T is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Viper Energy Partners (VNOM - Free Report) , a stock from the same industry, has gained 1.1%. The company reported its results for the quarter ended September 2023 more than a month ago.
Viper Energy reported revenues of $293.24 million in the last reported quarter, representing a year-over-year change of +32.3%. EPS of $1.10 for the same period compares with $0.98 a year ago.
Viper Energy is expected to post earnings of $0.51 per share for the current quarter, representing a year-over-year change of +82.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.6%.
Viper Energy has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.