It has been about a month since the last earnings report for EOG Resources (EOG - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is EOG 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 drivers.
EOG Resources Q3 Earnings and Revenues Beat Estimates
EOG Resources delivered third-quarter 2018 adjusted earnings of $1.75 per share, which outpaced the Zacks Consensus Estimate of $1.56 and improved significantly from the year-ago quarter’s 19 cents.
Total revenues increased 80.8% year over year to $4,781.6 million and exceeded the Zacks Consensus Estimate of $4,566 million.
Notably, increased production as well as higher oil and gas price realizations led to the impressive results in the quarter under review.
EOG Resources’ total volume in the third quarter increased 25.3% year over year to 68.9 million barrels of oil equivalent (MMBoe), beating the Zacks Consensus Estimate of 68MMBoe.
Crude oil and condensate production totalled 415 thousand barrels per day (MBbl/d), up 26.6% from the prior-year quarter’s level and ahead of the consensus mark of 410 MBbl/d. Natural gas liquids (NGL) volumes rose 46.2% year over year to 127.8MBbl/d and surpassed the Zacks Consensus Estimate of 116MBbl/d. Also, natural gas volumes increased to 1,236 million cubic feet per day (MMcf/d) from the year-earlier quarter’s level of 1,096 MMcf/d but lagged the consensus estimate of 1,265MMcf/d.
Average price realization for crude oil and condensates grew more than 44% year over year to $69.55 per barrel and surpassed the Zacks Consensus Estimate of $68 a barrel. Quarterly NGL prices increased 34.5% from $22.38 in the prior-year quarter to $30.09 per barrel and trumped the consensus mark of $26.7. Natural gas was sold at $2.74 per thousand cubic feet (Mcf), up 25.1% year over year and above the Zacks Consensus Estimate of $2.63 per Mcf.
At the end of the third quarter, EOG Resources had cash and cash equivalents of $1,274.1 million and long-term debt of $5,171.9 million. This represents a debt-to-capitalization ratio of 21.8%.
During the quarter, the company generated discretionary cash flow of approximately $2,282.3 million compared with $1,169.4 million in the year-ago quarter.
For 2018, EOG Resources expects total production between 714.9MBoe/d and 723.2MBoe/d. Of which, crude volumes are projected between 398 MBbl/d and 400MBbl/d. For the fourth quarter, the company anticipates total production in the range of 747.7-779.9MBoe/d.
Moreover, EOG Resources is planning to invest $4,900-$5,000 million of capital in exploration and development activities through 2018.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
At this time, EOG Resources has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, EOG Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.