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Why Is Comstock (CRK) Down 13.1% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Comstock Resources, Inc. (CRK - Free Report) . Shares have lost about 13.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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.
Fourth Quarter 2016 Results
Comstock Resources reported fourth-quarter 2016 loss of $2.58 per share (excluding one-time items), substantially wider than the Zacks Consensus Estimate of a loss of $1.37. The wider loss can be attributed to weak oil prices.
However, Comstock’s quarterly loss narrowed from the year-ago adjusted loss of $4.55 per share. Increasing natural gas volumes and a significant decline in operating expenses supported the improvement.
Quarterly revenues increased to $48 million from $47 million a year ago. Revenues were in line with the Zacks Consensus Estimate.
Volume Analysis
Comstock’s quarterly volume was 14 billion cubic feet equivalent (Bcfe). Suspension of the drilling program in Jun 2016, divestment of certain natural gas properties and closedown of Haynesville shale production led to the poor results.
For the full year, natural gas output grew 13%, whereas oil production plunged 55%.
Price Realizations
Average oil price realization (before hedging) was $45.96 per barrel compared with $36.26 per barrel in the fourth quarter of 2015. Average natural gas realization was $2.85 per thousand cubic feet/Mcf as against $1.97 per Mcf in the year-earlier quarter.
Costs & Expenses
Gathering and transportation costs came in at $3.6 million, down 20% from the year-ago quarter. Lease operating cost of $9.5 million saw a 36.2% year-over-year decline.
Total operating expense was down 83.9% from the fourth quarter of 2015 to $54.3 million.
Cash Flow & EBITDAX
Comstock’s operating cash inflow from continuing operations was $9.2 million. This compared favorably with the operating cash outflow of $3.3 million in the fourth quarter of 2015.
Earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other non-cash expenses (EBITDAX) from continuing operations increased. The metric inched up 1.1% year over year to $27.2 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Comstock spent $21.2 million on development drilling activities. This marks a 15.9% decline from $25.2 million spent a year ago. As of Dec 31, 2016, the company had $65.9 million in cash and cash equivalents and $1,044.5 million in long-term debt.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend for fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 46.5% due to these changes.
At this time, Comstock's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a '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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Comstock (CRK) Down 13.1% Since the Last Earnings Report?
A month has gone by since the last earnings report for Comstock Resources, Inc. (CRK - Free Report) . Shares have lost about 13.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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.
Fourth Quarter 2016 Results
Comstock Resources reported fourth-quarter 2016 loss of $2.58 per share (excluding one-time items), substantially wider than the Zacks Consensus Estimate of a loss of $1.37. The wider loss can be attributed to weak oil prices.
However, Comstock’s quarterly loss narrowed from the year-ago adjusted loss of $4.55 per share. Increasing natural gas volumes and a significant decline in operating expenses supported the improvement.
Quarterly revenues increased to $48 million from $47 million a year ago. Revenues were in line with the Zacks Consensus Estimate.
Volume Analysis
Comstock’s quarterly volume was 14 billion cubic feet equivalent (Bcfe). Suspension of the drilling program in Jun 2016, divestment of certain natural gas properties and closedown of Haynesville shale production led to the poor results.
For the full year, natural gas output grew 13%, whereas oil production plunged 55%.
Price Realizations
Average oil price realization (before hedging) was $45.96 per barrel compared with $36.26 per barrel in the fourth quarter of 2015. Average natural gas realization was $2.85 per thousand cubic feet/Mcf as against $1.97 per Mcf in the year-earlier quarter.
Costs & Expenses
Gathering and transportation costs came in at $3.6 million, down 20% from the year-ago quarter. Lease operating cost of $9.5 million saw a 36.2% year-over-year decline.
Total operating expense was down 83.9% from the fourth quarter of 2015 to $54.3 million.
Cash Flow & EBITDAX
Comstock’s operating cash inflow from continuing operations was $9.2 million. This compared favorably with the operating cash outflow of $3.3 million in the fourth quarter of 2015.
Earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other non-cash expenses (EBITDAX) from continuing operations increased. The metric inched up 1.1% year over year to $27.2 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Comstock spent $21.2 million on development drilling activities. This marks a 15.9% decline from $25.2 million spent a year ago. As of Dec 31, 2016, the company had $65.9 million in cash and cash equivalents and $1,044.5 million in long-term debt.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend for fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 46.5% due to these changes.
Comstock Resources, Inc. Price and Consensus
Comstock Resources, Inc. Price and Consensus | Comstock Resources, Inc. Quote
VGM Scores
At this time, Comstock's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a '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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.