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EOG Resources (EOG) Up 1.6% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for EOG Resources, Inc. (EOG - Free Report) . Shares have added about 1.6% in that time frame.

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

Recent Earnings

EOG Resourcesdelivered first-quarter 2018 adjusted earnings of $1.19 per share, which beat the Zacks Consensus Estimate of $1.01. The figure increased significantly from the year-earlier quarter’s earnings of 15 cents.

Total revenues in the quarter jumped 41% year over year to $3,681.2 million. Moreover, the top line also beat the Zacks Consensus Estimate of $3,458 million.  

The strong first-quarter 2018 results were supported by increased production as well as higher oil and gas price realizations. Further, lower exploration costs contributed to the growth.

Operational Performance

In the quarter under review, EOG Resources’ total volume increased 15.6% year over year to 59.4 million barrels of oil equivalent (MMBoe) and was in line with the Zacks Consensus Estimate.

Crude oil and condensate production in the quarter totaled 363.3 thousand barrels per day (MBbl/d), up 15.1% from the prior-year quarter’s level and also came above the Zacks Consensus Estimate of 360 MBbl/d. Natural gas liquids (NGL) volumes jumped 27.7% year over year to 100.6 MBbl/d and beat the Zacks Consensus Estimate of 98 MBbl/d. Also, natural gas volumes increased to 1,176 million cubic feet per day (MMcf/d) from the year-earlier quarter’s level of 1, 058 MMcf/d and surpassed the Zacks Consensus Estimate of 1,172 MMcf/d.     

Average price realization for crude oil and condensates grew nearly 28% year over year to $64.27 per barrel and increased from the Zacks Consensus Estimate of $61 per barrel. Quarterly NGL prices also grew 13.1% from $21.63 in the prior-year quarter to $24.46 per barrel but lagged the Zacks Consensus Estimate of $25.38 per barrel. Natural gas was sold at $2.83 per thousand cubic feet (Mcf), up 17% year over year and came above the Zacks Consensus Estimate of $2.79 per Mcf.

Liquidity Position

At the end of the first quarter, EOG Resources had cash and cash equivalents of $816.1 million and long-term debt of $6,071.6 million. This represents a debt-to-capitalization ratio of 26.5%.    

During the quarter, the company generated approximately $1,859.8 million in discretionary cash flow compared with $1,072.8 million in the year-ago quarter.

Guidance

For 2018, the company expects total production between 685.8 MBoe/d and 728.5 MBoe/d. Of which, crude volumes are projected between 389.4 MBbl/d and 405.6 MBbl/d. The company expects crude volume to increase between 16% and 20%. For the second quarter, the company anticipates total production in the range of 670.3-706.2 MBoe/d.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to four lower.

EOG Resources, Inc. Price and Consensus

 

EOG Resources, Inc. Price and Consensus | EOG Resources, Inc. Quote

VGM Scores

At this time, EOG has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 growth and momentum investors.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, EOG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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