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Why Is CNX Resources (CNX) Up 8.2% Since Its Last Earnings Report?

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A month has gone by since the last earnings report for CNX Resources Corporation (CNX - Free Report) . Shares have added about 8.2% in that time frame.

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

CNX Resources Beats Q1 Earnings and Revenue Estimates

CNX Resources Corporation reported adjusted earnings of 19 cents per share in first-quarter 2018, beating the Zacks Consensus Estimate of 12 cents by 58.3%. The bottom line improved 11.8% year over year.

Revenues

CNX Resources’ total revenues of $495.7 million in the first quarter surpassed the Zacks Consensus Estimate of $406 million by 22.1%.

Total revenues were higher than the year-ago quarter figure by 54.9%. The significant year-over-year growth was due to higher contribution from Natural Gas, NGL and oil sales and gain on Commodity Derivative Instrument.

Highlights of the Release

CNX Resources registered a 36% year-over-year increase in gas sales volumes to 129.5 billion cubic feet equivalent (Bcfe) in the first quarter. The surge was primarily due to higher Utica Shale volumes.

The average sales price of $3 per thousand cubic feet gas equivalent (Mcfe), when combined with unit cost of $2.10 per Mcfe, resulted in a margin of 90 cents per Mcfe. This marked an increase from the year-earlier quarter due to improvement in average sales price and total production costs.

In the reported quarter the company bought back 5.8 million shares.

Financial Update

As of Mar 31, 2018, CNX Resources had cash and cash equivalent of $82.5 million, considerably down from $509.2 million as of Dec 31, 2017.

Total long-term debt as of Mar 31, 2018 was $2,229.8 million, higher than $2,207.4 million as of Dec 31, 2017.

Cash from operating activities for the first quarter was $259.3 million, up 59% from $163.1 million in the year-ago quarter.

Capital expenditure in the quarter was $232.5 million, higher than the year-ago level of $103.9 million.

Guidance

CNX Resources reaffirmed its 2018 capital expenditure forecast of $790-$915 million and production guidance of 500-525 Bcfe.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter.

VGM Scores

At this time, CNX has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. The stock was also 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.

Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. Interestingly, CNX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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