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Newfield (NFX) Down 25.2% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Newfield Exploration (NFX - Free Report) . Shares have lost about 25.2% in that time frame, underperforming the S&P 500.

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

Newfield Q3 Earnings and Revenues Top Estimates

Newfield posted adjusted third-quarter 2018 earnings of $1.01 per share, which beat the Zacks Consensus Estimate of 85 cents. The company had delivered adjusted profit of 52 cents in the year-ago quarter.

Total revenues amounted to $711.0 million, up from $439.0 million in the year-ago quarter. The figure also surpassed the Zacks Consensus Estimate of $648 million.

The upside can be primarily attributed to outstanding performance in the Anadarko Basin.

Operational Performance

Total quarterly production of 18.6 million barrels of oil equivalent (MMBoe) was up from 14.9MMBoe in the year-ago quarter. It comprised 38% oil, 24% natural gas liquids (NGLs) and 38% natural gas.

Natural gas volumes totaled 42.5 billion cubic feet (bcf), which beat the Zacks Consensus Estimate of 40.05bcf. Oil, condensate and NGLs volumes came in at 11.5 million barrels.

Newfield’s third-quarter oil and natural gas price realizations (including the effect of hedges) averaged $38.16 per barrel of oil equivalent. Natural gas prices were $2.34 per thousand cubic feet (mcf), missing the Zacks Consensus Estimate of $2.39 per mcf. Oil prices were $66.22 per barrel, beating the Zacks Consensus Estimate of $65 per barrel. NGLs prices were $31.73 per barrel, which missed the Zacks Consensus Estimate of $31.97 per barrel.

Financials

At the end of the quarter, Newfield had cash balance of $264.0 million. Long-term debt was $2,436.0 million, which represents a debt-to-capitalization ratio of approximately 56.6%.

Guidance

For 2018, Newfield raised output guidance to 185-200 MBoe/d from 180-190 MBoe/d. Capital expenditure is estimated at $1,400 million, up from the previous guidance of $1,350 million. Of the total production, Anadarko Basin expects output in the range of 130-135 MBoe/d.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -7.7% due to these changes.

VGM Scores

Currently, Newfield has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Newfield has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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