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Callon (CPE) Up 8.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Callon Petroleum . Shares have added about 8.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Callon 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.
Callon Q4 Earnings Miss Estimates, Revenues Fall Y/Y
Callon Petroleum Company reported fourth-quarter 2023 adjusted earnings of $1.62 per share, which missed the Zacks Consensus Estimate of $1.74. The bottom line declined from the $3.36 reported a year ago.
Operating revenues of $601.4 million beat the Zacks Consensus Estimate of $563 million. However, the top line declined from the year-ago quarter’s $704.2 million.
The weak quarterly earnings were driven by lower realized oil equivalent prices and production volumes.
Production
In the fourth quarter, CPE’s net production volume was 103,426 barrels of oil-equivalent per day (Boe/d), down from the year-ago period’s 106,287 Boe/d. Our projection for the same was pinned at 101,554 Boe/d. Production volume increased year over year in the Permian Basin. Of the total fourth-quarter production, 57% was oil.
Callon’s oil production in the quarter totaled 5,402 thousand barrels (MBbls), down from the year-ago level of 6,092 MBbls. The figure beat our estimate of 5,272 MBbls.
Natural gas production increased to 12,096 million cubic feet (MMcf) from 10,543 MMcf reported in the year-ago quarter and beat our estimate of 11,608 MMcf.
Also, natural gas liquids (NGLs) production in the quarter under review totaled 2,097 MBbls, up from the year-ago figure of 1,930 MBbls. The metric slightly lagged our projection of 2,136.1 MBbls.
The average realized price per barrel of oil equivalent was $51.54. The figure declined from the year-ago quarter’s $62 and missed our estimate of $53.42.
The average realized price for oil was $79.05 per barrel compared with $84.33 a year ago. The average realized price per barrel for NGLs was $20.94, lower than the year-ago level of $25.79. The figure missed our estimate of $23.18.
The average realized price for natural gas was $1.60 per thousand cubic feet, down from $4.06 a year ago.
Total Expenses
Callon’s total operating expenses of $419.8 million increased from the year-ago level of $399.7 million.
Total lease operating costs increased to $77.9 million from the prior-year figure of $74.1 million. The company’s per-unit lease operating expenses increased to $8.19 per barrel of oil equivalent from $7.58 a year ago.
Capital Expenditure & Balance Sheet
The capital expenditure in the reported quarter amounted to $170.5 million. Callon generated an adjusted free cash flow of $120.2 million, significantly down from $165 million a year ago.
As of Dec 31, 2023, the company’s total cash and cash equivalents amounted to $3.3 million. The long-term debt totaled $1.9 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -6.38% due to these changes.
VGM Scores
At this time, Callon 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 B. 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 this revision indicates a downward shift. It's no surprise Callon has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Callon belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, Matador Resources (MTDR - Free Report) , has gained 4.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Matador reported revenues of $836.13 million in the last reported quarter, representing a year-over-year change of +18.2%. EPS of $1.99 for the same period compares with $2.08 a year ago.
For the current quarter, Matador is expected to post earnings of $1.39 per share, indicating a change of -7.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -7.4% over the last 30 days.
Matador has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Callon (CPE) Up 8.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Callon Petroleum . Shares have added about 8.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Callon 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.
Callon Q4 Earnings Miss Estimates, Revenues Fall Y/Y
Callon Petroleum Company reported fourth-quarter 2023 adjusted earnings of $1.62 per share, which missed the Zacks Consensus Estimate of $1.74. The bottom line declined from the $3.36 reported a year ago.
Operating revenues of $601.4 million beat the Zacks Consensus Estimate of $563 million. However, the top line declined from the year-ago quarter’s $704.2 million.
The weak quarterly earnings were driven by lower realized oil equivalent prices and production volumes.
Production
In the fourth quarter, CPE’s net production volume was 103,426 barrels of oil-equivalent per day (Boe/d), down from the year-ago period’s 106,287 Boe/d. Our projection for the same was pinned at 101,554 Boe/d. Production volume increased year over year in the Permian Basin. Of the total fourth-quarter production, 57% was oil.
Callon’s oil production in the quarter totaled 5,402 thousand barrels (MBbls), down from the year-ago level of 6,092 MBbls. The figure beat our estimate of 5,272 MBbls.
Natural gas production increased to 12,096 million cubic feet (MMcf) from 10,543 MMcf reported in the year-ago quarter and beat our estimate of 11,608 MMcf.
Also, natural gas liquids (NGLs) production in the quarter under review totaled 2,097 MBbls, up from the year-ago figure of 1,930 MBbls. The metric slightly lagged our projection of 2,136.1 MBbls.
Price Realizations (Without Cash-Settled Derivative Impacts)
The average realized price per barrel of oil equivalent was $51.54. The figure declined from the year-ago quarter’s $62 and missed our estimate of $53.42.
The average realized price for oil was $79.05 per barrel compared with $84.33 a year ago. The average realized price per barrel for NGLs was $20.94, lower than the year-ago level of $25.79. The figure missed our estimate of $23.18.
The average realized price for natural gas was $1.60 per thousand cubic feet, down from $4.06 a year ago.
Total Expenses
Callon’s total operating expenses of $419.8 million increased from the year-ago level of $399.7 million.
Total lease operating costs increased to $77.9 million from the prior-year figure of $74.1 million. The company’s per-unit lease operating expenses increased to $8.19 per barrel of oil equivalent from $7.58 a year ago.
Capital Expenditure & Balance Sheet
The capital expenditure in the reported quarter amounted to $170.5 million. Callon generated an adjusted free cash flow of $120.2 million, significantly down from $165 million a year ago.
As of Dec 31, 2023, the company’s total cash and cash equivalents amounted to $3.3 million. The long-term debt totaled $1.9 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -6.38% due to these changes.
VGM Scores
At this time, Callon 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 B. 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 this revision indicates a downward shift. It's no surprise Callon has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Callon belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, Matador Resources (MTDR - Free Report) , has gained 4.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Matador reported revenues of $836.13 million in the last reported quarter, representing a year-over-year change of +18.2%. EPS of $1.99 for the same period compares with $2.08 a year ago.
For the current quarter, Matador is expected to post earnings of $1.39 per share, indicating a change of -7.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -7.4% over the last 30 days.
Matador has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.