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Why Is CNX Resources (CNX) Down 12.5% Since Last Earnings Report?

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A month has gone by since the last earnings report for CNX Resources (CNX - Free Report) . Shares have lost about 12.5% in that time frame, underperforming the S&P 500.

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

CNX Resources Q3 Revenues Beat, Earnings Miss

CNX Resources Corporation delivered adjusted earnings of 17 cents per share in third-quarter 2018, missing the Zacks Consensus Estimate of 19 cents by 10.5%. However, the bottom line was up 94.4% year over year.

Revenues

CNX Resources’ total revenues of $397.1 million in the third quarter surpassed the Zacks Consensus Estimate of $382 million by 4%.

Moreover, the top line was higher than the year-ago quarterly figure by 38.3%. This significant year-over-year growth was owing to higher contribution from Natural Gas, primarily driven by a considerable increase in Utica Shale volumes and Marcellus Sales Volumes.

Highlights of the Release

CNX Resources registered a 17.8% year-over-year expansion in gas sales volumes to 119 billion cubic feet equivalent (Bcfe) in the quarter under review. The surge was primarily attributable to higher Utica Shale volumes as well as Marcellus Sales Volumes.

The average sales price of $2.92 per thousand cubic feet gas equivalent (Mcfe) when combined with unit cost of $1.97 per Mcfe, led in a margin of 95 cents per Mcfe. This in turn, marked an increase from the year-earlier quarter owing to improvement in average sales price and a decline in total production costs.

In the reported quarter, the company bought back 8.3 million shares.

Financial Update

As of Sep 30, 2018, CNX Resources had cash and cash equivalents of $42.7 million, down substantially from $509.2 million as of Dec 31, 2017.

Total long-term debt as of Sep 30, 2018 was $2,199.6 million, lower than $2,207.4 million as of Dec 31, 2017.

Cash from operating activities for the third quarter was $239.3 million, up 31.9% from $181.4 million in the year-ago quarter.

Capital expenditure in the quarter under discussion was $297.5 million, higher than the prior-year level of $149.5 million.

Guidance

CNX Resources reaffirms its 2018 capital expenditure projection of $900-$950 million. However, the company narrows the production outlook to 497.5-507.5 Bcfe from the previous guidance of 490-515 Bcfe.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 18.92% due to these changes.

VGM Scores

At this time, CNX Resources has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile 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.

Outlook

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




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