A month has gone by since the last earnings report for W&T Offshore (WTI Quick QuoteWTI - Free Report) . Shares have lost about 9.6% 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 catalysts.

W&T Offshore Q2 Earnings Lag Estimates

W&T Offshore reported a second-quarter 2024 loss of 5 cents per share (excluding one item), wider than the Zacks Consensus Estimate of a loss of 3 cents. However, the bottom line improved from the year-ago quarter’s reported loss of 8 cents.

Total quarterly revenues of $142.8 million missed the Zacks Consensus Estimate of $152 million. However, the top line increased from $126 million reported in the prior-year quarter.

The weaker-than-expected quarterly earnings were due to low oil-equivalent production and rising operating expenses. This was partially offset by higher average realized prices for oil-equivalent production.

Production Statistics

Production for the quarter averaged 34.9 thousand barrels of oil equivalent per day (MBoe/d), down from 37 MBoe/d in the corresponding period of 2023. The reported metric was lower than our estimate of 37 Mboe/d. The production was negatively impacted by the company’s primary Mobile Bay processing plant getting shut down by the third-party operator to perform a turnaround. The decrease was partially offset by increased production from wells acquired in January 2024 and September 2023.

Oil production totaled 1,382 thousand barrels (MBbls), up from 1,254 MBbls in the year-ago quarter. The figure missed our estimate of 1,387 MBbls.

Natural gas liquids’ output totaled 334 MBbls, which decreased from 443 MBbls a year ago but surpassed our estimate of 312 MBbls.

Natural gas production of 8,769 million cubic feet (MMcf) was lower than 10,023 MMcf in the prior-year quarter. The figure missed our estimate of 10,017 MMcf.

Realized Commodity Prices

The average realized price for oil in the second quarter was $80.29 per barrel, higher than the year-ago level of $71.76. Our estimate for the same was pegged at $81.46.

The average realized price of NGL increased to $24.43 per barrel from $23.44 in the second quarter of 2023. Our estimate for the same was pinned at $20.69 per barrel.

The average realized price of natural gas in the June-end quarter was $2.50 per thousand cubic feet, up from $2.34 in the corresponding period of 2023 and above our estimate of $2.33.

The average realized price for oil-equivalent output increased to $44.40 per barrel from $36.76 a year ago. The figure also beat our estimate of $42.38.

Operating Expenses

Lease operating expenses increased to $23.29 per Boe from $19.60 in the year-ago period. The reported figure was lower than our estimate of $25.98.

Also, general and administrative expenses increased to $6.72 per Boe from $5.16 a year ago. The figure was higher than our estimate of $5.44.

Cash Flow

Net cash from operations totaled $37.4 million, up from $26.2 million in the year-ago quarter.

The free cash flow increased to $18.7 million from $9.7 million in the year-earlier quarter.

Capital Spending & Balance Sheet

For the reported quarter, W&T Offshore spent $8.8 million on oil and gas resources and equipment.

As of Jun 30, 2024, the company’s cash and cash equivalents amounted to $123.4 million and net long-term debt totaled $376.9 million. The current portion of the long-term debt is $14.9 million.

Guidance

For the third quarter of 2024, W&T Offshore expects production to be in the band of 2,842-3,208 Mboe. For 2024, its production is anticipated to be in the 11,900-13,267 Mboe range.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -425% due to these changes.

VGM Scores

Currently, W&T has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 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 belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, EQT Corporation (EQT Quick QuoteEQT - Free Report) , has gained 8.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

EQT reported revenues of $1.18 billion in the last reported quarter, representing a year-over-year change of +19.1%. EPS of -$0.08 for the same period compares with -$0.17 a year ago.

EQT is expected to post earnings of $0.19 per share for the current quarter, representing a year-over-year change of -36.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.7%.

EQT has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.