It has been about a month since the last earnings report for Cimarex Energy Co (XEC - Free Report) . Shares have lost about 16.1% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is XEC 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 catalysts.
First-Quarter 2018 Results
Cimarex Energy reported first-quarter 2018 earnings per share of $1.82 that beat the Zacks Consensus Estimate of $1.70 and improved from the year-ago $1.05.
In the first quarter, Cimarex Energy’s total revenues of $567.1 million surpassed the Zacks Consensus Estimate of $562.9 million. The figure also increased from $447.2 million a year ago.
The strong first-quarter results were primarily aided by increased production in the Permian Basin and higher oil price realization.
In the quarter under review, total average production was 206.1 thousand barrels of oil equivalent (MBOE) per day, jumped 16.3% year over year. Oil volumes increased 25% year over year to 65.2 thousand barrels per day (MBbls/d) and natural gas volumes rose 9.7% to 534.7 MMcf. Natural gas liquids (NGL) volumes improved 18% to 51.7 MBbls/d. Higher activities in both the Mid-Continent area and the Permian Basin led to the improvement.
Year-over-year realized prices for natural gas declined 24.3% to $2.28 per thousand cubic feet but realized prices for crude surged 25.6% to $59.93 per barrel. The price of NGL decreased a marginal 1% to $20.19 per barrel.
As of Mar 31, 2018, a total of 54 gross (15 net) wells were brought online by the company, significantly lower than 70 gross (26 net) wells as of Mar 31, 2017.
Cimarex Energy had cash and cash equivalents of $463.8 million as of Mar 31, 2018. Net long-term debt was $1.5 billion as of Mar 31, 2018, which represents a debt-to-capitalization ratio of 34.9%.
Cimarex Energy's net cash from operating activities was recorded at $383.1 million, higher than $249.5 million in the prior-year quarter. Through the January-to-March quarter, the firm spent $313 million on operations related to exploration and production. Cimarex allocated roughly $264 million of the total amount to drilling and completion work. The company financed the entire amount through operating cashflows.
The company has maintained its total production projection for 2018 in the range of 211-221 thousand barrels of oil equivalent per day (MBoe/d). Cimarex Energy also projects production through the April-to-June quarter between 200 MBoe/d and 209 MBoe/d.
The company reiterated its capital spending for 2018 between $1.6 billion and $1.7 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been seven revisions higher for the current quarter compared to 12 lower.
Cimarex Energy Co Price and Consensus
At this time, XEC has a strong Growth Score of A, though it is lagging a lot on the momentum front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, XEC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.