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Why Is Newfield Exploration (NFX) Down 7.4% Since the Last Earnings Report?

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It has been about a month since the last earnings report for Newfield Exploration Company (NFX - Free Report) . Shares have lost about 7.4% 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 its most recent earnings report in order to get a better handle on the important drivers.

Newfield Exploration Misses on Q2 Earnings & Revenues

Newfield Exploration reported adjusted second-quarter 2017 earnings of $0.43 per share, missing the Zacks Consensus Estimate of $0.44. However, the bottom line was higher than adjusted profit of $0.32 a year ago.

The company’s total revenue jumped to $402 million from $381 million in the year-ago period but lagged the Zacks Consensus Estimate of $424.6 million.

Operational Performance

Total quarterly production of 13.6 million barrels of oil equivalent (MMBoe) was down from 15.3 MMBoe in the year earlier quarter. It comprised 44% oil, 18% natural gas liquids (NGLs) and 38% natural gas.

Natural gas volumes totaled 31.2 billion cubic feet. Oil, condensate and NGLs volumes came in at 8.4 million barrels.

Newfield’s second-quarter oil and natural gas price realizations (including the effect of hedges) averaged $31.11 per barrel of oil equivalent. Natural gas prices were $2.61 per thousand cubic feet, oil prices were $46.81 per barrel and NGLs prices were $24.54 per barrel.

Financials

At the quarter end, Newfield had cash balance of $522.0 million. Long-term debt was $2,432.0 million, which represents a debt-to-capitalization ratio of approximately 66.8%.

Guidance

For 2017, Newfield anticipates output of 149.4–157.8 MBoe. The company projects LOE at $3.76 per Boe. It also expects production and other taxes at $1.05 per Boe. General and administration expenses are estimated at $3.58 per Boe.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to six lower.

VGM Scores

At this time, the stock has a nice Growth Score of B, though it is lagging a lot on the momentum 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 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. Interestingly, 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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