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Why Is Diamondback (FANG) Up 7.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Diamondback Energy (FANG - Free Report) . Shares have added about 7.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Diamondback 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 catalysts.
Diamondback Q4 Earnings Beat Estimates on Strong Production
Diamondback Energy reported fourth-quarter 2023 adjusted earnings per share of $4.74, beating the Zacks Consensus Estimate of $4.61. The outperformance primarily reflects strong production.
However, the bottom line declined from the year-ago adjusted figure of $5.29 due to a drop in overall realization and higher costs.
Meanwhile, revenues of $2.2 billion rose 9.8% from the year-ago quarter’s sales and outperformed the Zacks Consensus Estimate by $81 million.
In good news for investors, the company is using the excess cash to reward them with dividends and buybacks. As part of that, FANG’s board of directors declared a quarterly cash dividend of 90 cents per share to its common shareholders of record on Mar 5. The payout will be made on Mar 12. In addition to the regular dividend, FANG declared a special dividend of $2.18 per share.
The company also executed $129 million of share repurchases during the fourth quarter of 2023 at $148.15 apiece.
Production & Realized Prices
FANG’s production of oil and natural gas averaged 462,565 barrels of oil equivalent per day (BOE/d), comprising 59% oil. The figure was up 18.2% from the year-ago quarter and surpassed our estimate of 459,267.1 BOE/d. While crude and natural gas output increased 20.8% and 12.2% year over year, respectively, natural gas liquids volumes rose 17% from the fourth quarter of 2022.
The average realized oil price during the most recent quarter was $76.42 per barrel, 4.9% lower than the year-ago realization of $80.37 but ahead of our projection of $74.13. Meanwhile, the average realized natural gas price plunged to $1.29 per thousand cubic feet (Mcf) from $3.20 in the year-ago period and came below our estimate of $1.47. Overall, the upstream oil and gas company fetched $50.87 per barrel compared with $55.76 a year ago.
Costs & Financial Position
Diamondback’s fourth-quarter cash operating cost was $10.83 per barrel of oil equivalent (BOE) compared to $10.16 in the prior-year quarter and our projection of $11.93. The rise in costs reflected an increase in lease operating expenses to $5.97 per BOE from $4.47 in the fourth quarter of 2022. On a somewhat positive note, FANG’s production taxes decreased 24.2% year over year to $2.44 per BOE, while gathering and transportation expenses edged down in the fourth quarter of 2023 to $1.83 per BOE from $1.86 during the corresponding period of 2022.
Diamondback spent $649 million in capital expenditure — $603 million on drilling and completion, $31 million on infrastructure, environment and $15 million on midstream. The company booked $910 million in free cash flows in the fourth quarter.
As of Dec 31, the Permian-focused operator had approximately $582 million in cash and cash equivalents, and $6.6 billion in long-term debt, representing a debt-to-capitalization of 27.6%.
Guidance
In 2024, FANG said it looks to pump around 458,000-466,000 BOE/d of hydrocarbon. Of this, oil volumes are likely to be between 270,000 and 275,000 barrels per day. The company forecast a capital spending budget between $2.3 billion and $2.55 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Diamondback has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. 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 C. 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, Diamondback 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
Diamondback is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Antero Resources (AR - Free Report) , a stock from the same industry, has gained 4.1%. The company reported its results for the quarter ended December 2023 more than a month ago.
Antero Resources reported revenues of $1.19 billion in the last reported quarter, representing a year-over-year change of -42.7%. EPS of $0.22 for the same period compares with $1.04 a year ago.
Antero Resources is expected to post earnings of $0.13 per share for the current quarter, representing a year-over-year change of -74.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -14.8%.
Antero Resources has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Why Is Diamondback (FANG) Up 7.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Diamondback Energy (FANG - Free Report) . Shares have added about 7.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Diamondback 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 catalysts.
Diamondback Q4 Earnings Beat Estimates on Strong Production
Diamondback Energy reported fourth-quarter 2023 adjusted earnings per share of $4.74, beating the Zacks Consensus Estimate of $4.61. The outperformance primarily reflects strong production.
However, the bottom line declined from the year-ago adjusted figure of $5.29 due to a drop in overall realization and higher costs.
Meanwhile, revenues of $2.2 billion rose 9.8% from the year-ago quarter’s sales and outperformed the Zacks Consensus Estimate by $81 million.
In good news for investors, the company is using the excess cash to reward them with dividends and buybacks. As part of that, FANG’s board of directors declared a quarterly cash dividend of 90 cents per share to its common shareholders of record on Mar 5. The payout will be made on Mar 12. In addition to the regular dividend, FANG declared a special dividend of $2.18 per share.
The company also executed $129 million of share repurchases during the fourth quarter of 2023 at $148.15 apiece.
Production & Realized Prices
FANG’s production of oil and natural gas averaged 462,565 barrels of oil equivalent per day (BOE/d), comprising 59% oil. The figure was up 18.2% from the year-ago quarter and surpassed our estimate of 459,267.1 BOE/d. While crude and natural gas output increased 20.8% and 12.2% year over year, respectively, natural gas liquids volumes rose 17% from the fourth quarter of 2022.
The average realized oil price during the most recent quarter was $76.42 per barrel, 4.9% lower than the year-ago realization of $80.37 but ahead of our projection of $74.13. Meanwhile, the average realized natural gas price plunged to $1.29 per thousand cubic feet (Mcf) from $3.20 in the year-ago period and came below our estimate of $1.47. Overall, the upstream oil and gas company fetched $50.87 per barrel compared with $55.76 a year ago.
Costs & Financial Position
Diamondback’s fourth-quarter cash operating cost was $10.83 per barrel of oil equivalent (BOE) compared to $10.16 in the prior-year quarter and our projection of $11.93. The rise in costs reflected an increase in lease operating expenses to $5.97 per BOE from $4.47 in the fourth quarter of 2022. On a somewhat positive note, FANG’s production taxes decreased 24.2% year over year to $2.44 per BOE, while gathering and transportation expenses edged down in the fourth quarter of 2023 to $1.83 per BOE from $1.86 during the corresponding period of 2022.
Diamondback spent $649 million in capital expenditure — $603 million on drilling and completion, $31 million on infrastructure, environment and $15 million on midstream. The company booked $910 million in free cash flows in the fourth quarter.
As of Dec 31, the Permian-focused operator had approximately $582 million in cash and cash equivalents, and $6.6 billion in long-term debt, representing a debt-to-capitalization of 27.6%.
Guidance
In 2024, FANG said it looks to pump around 458,000-466,000 BOE/d of hydrocarbon. Of this, oil volumes are likely to be between 270,000 and 275,000 barrels per day. The company forecast a capital spending budget between $2.3 billion and $2.55 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Diamondback has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. 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 C. 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, Diamondback 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
Diamondback is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Antero Resources (AR - Free Report) , a stock from the same industry, has gained 4.1%. The company reported its results for the quarter ended December 2023 more than a month ago.
Antero Resources reported revenues of $1.19 billion in the last reported quarter, representing a year-over-year change of -42.7%. EPS of $0.22 for the same period compares with $1.04 a year ago.
Antero Resources is expected to post earnings of $0.13 per share for the current quarter, representing a year-over-year change of -74.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -14.8%.
Antero Resources has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.