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Why Is Pioneer Natural Resources (PXD) Down 9.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Pioneer Natural Resources (PXD - Free Report) . Shares have lost about 9.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Pioneer Natural 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 its most recent earnings report in order to get a better handle on the important drivers.

Pioneer Natural Q3 Earnings and Revenues Beat Estimates

Pioneer Natural Resources Company reported third-quarter 2018 earnings of $2.07 per share, excluding one-time items, which surpassed the Zacks Consensus Estimate of $1.69 and the year-ago quarter figure of 48 cents.

Revenues and other income surged 112.2% year over year to $2,476 million from $1,167 million in the year-ago quarter. The top line also exceeded the consensus mark of $2,277 million.

Higher production volumes of liquids and natural gas as well as increased oil equivalent price realizations supported the strong third-quarter results.

Production

Total production in the reported quarter averaged 320.7 thousand barrels of oil equivalent per day (MBOE/d), which improved 16.3% year over year and beat the Zacks Consensus Estimate of 318 MBOE/d. The upside can be attributed to higher activities in the Permian Basin.

Oil production averaged 195.1 thousand barrels per day (MBbl/d), up 20.7% year over year and outpaced the Zacks Consensus Estimate of 192 MBbl/d. Natural gas liquids (NGLs) production jumped 9.2% year over year to 62.6 MBbl/d and came in line with the Zacks Consensus Estimate. Natural gas productions amounted to 377.6 million cubic feet per day (MMcf/d), up from the year-ago quarter’s level of 340.4 MMcf/d. The figure, however, missed the Zacks Consensus Estimate of 379 MMcf/d.  

Price Realization

On an oil equivalent basis, average realized price was $44.64 per barrel in the reported quarter compared with $33.72 a year ago. The company reported its average realized crude price at $57.54 a barrel, up from $45.35 in September quarter of 2017.   

Average natural gas price dropped 14.3% year over year to $2.21 per thousand cubic feet (Mcf). Natural gas liquids were sold at $35.97 a barrel, up from $18.96 in the year-ago quarter.

Cash, Debt and Capex

At the end of the quarter under review, cash balance totaled $919 million. Long-term debt summed $2,286 million, reflecting a debt-to-capitalization ratio of 16.1%.

Guidance

Pioneer Natural expects production in the Permian basin to lie in the range of 188-194 MBOE/d in the December quarter of 2018. For the fourth quarter, the company projects production costs in the band of $9-$11 per BOE.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Pioneer Natural 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Pioneer Natural 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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