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Why Is EQT (EQT) Up 4.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for EQT Corporation (EQT - Free Report) . Shares have added about 4.5% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is EQT 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 drivers.

EQT Q1 Earnings Top Estimates on Higher Sales Volumes

EQT Corporation reported first-quarter 2024 adjusted earnings from continuing operations of 82 cents per share, which beat the Zacks Consensus Estimate of 65 cents. However, the bottom line decreased from the year-ago quarter’s reported figure of $1.70.

Adjusted operating revenues decreased to $1.72 billion from $1.89 billion in the prior-year quarter. The top line, however, beat the Zacks Consensus Estimate of $1.64 billion.

Better-than-expected quarterly results were driven by higher sales volumes.

Production

Sales volumes increased to 534 billion cubic feet equivalent (Bcfe) from the year-ago quarter’s level of 459 Bcfe. The reported figure also beat our estimate of 530.4 Bcfe.

Natural gas sales volume was 499.3 Bcf in the first quarter, up from 433.4 Bcf reported in the year-ago quarter. The figure was marginally lower than our estimate of 499.5 Bcf.

The total liquid sales volume was 5,796 thousand barrels (MBbls), up from the year-ago period’s level of 4,235 MBbls. The metric also exceeded our projection of 5,143 MBbls.

Commodity Price Realizations

The average realized price was $3.22 per thousand cubic feet of natural gas equivalent (Mcfe), down from the year-ago quarter’s figure of $4.11 per Mcfe.

The average natural gas price, including cash-settled derivatives, was $3.08 per Mcf, which decreased year over year from $4.10.

The natural gas sales price was $2.39 per Mcf in the fourth quarter, lower than the year-ago quarter’s reported number of $3.62.

Also, oil prices were $58.74 per barrel compared with the year-ago quarter’s figure of $58.37. Our estimate for the same was pinned at $58.62 per barrel.

Expenses

Total operating expenses were $1.23 billion in the first quarter of 2024, higher than $1.05 billion reported in the prior-year quarter. The reported figure came in lower than our estimate of $1.59 billion.

Transmission expenses totaled 32 cents per Mcfe, down from the year-ago quarter’s level of 34 cents. Lease operating expenses amounted to 10 cents, up from the prior-year quarter’s figure of 6 cents.

Cash Flows

EQT’s adjusted operating cash flow totaled $950.5 million in the quarter, down from $1,237.1 million reported a year ago. The free cash flow in the quarter totaled $401.6 million, down from $773.6 million in the year-ago period.

Capex & Balance Sheet

Total capital expenditure was $549 million in the first quarter, up from $464 million reported a year ago.

As of Mar 31, 2024, the company had cash and cash equivalents of $648 million, and net debt worth $4.86 billion.

Guidance

For 2024, total sales volumes are expected to be in the range of 2,100-2,200 Bcfe, indicating an increase from 2,016 Bcfe reported in 2023.

For the second quarter of 2024, EQT expects total sales volumes of 455-505 Bcfe, with liquids sales volumes (excluding ethane) of 3,250-3,550 Mbbl.

The company expects total per-unit operating costs in the band of $1.43-$1.55 per Mcfe for the second quarter. Capital expenditure for the second quarter is projected to be in the $545-$620 million range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -78.26% due to these changes.

VGM Scores

Currently, EQT has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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, EQT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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