A month has gone by since the last earnings report for EOG Resources (EOG - Free Report) . Shares have lost about 0.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is 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 its most recent earnings report in order to get a better handle on the important catalysts.
EOG Resources Lags Q4 Earnings Estimates, Increases Y/Y
EOG Resourcesdelivered fourth-quarter 2018 adjusted earnings of $1.24 per share, which missed the Zacks Consensus Estimate of $1.34. The company posted earnings of 69 cents in the year-ago quarter.
Total revenues in the quarter improved 36.9% year over year to $4,574.5 million. Moreover, the top line beat the Zacks Consensus Estimate of $4,492 million.
The quarterly results were supported by higher production as well as increased oil and gas price realizations. This was partially offset by higher total expenses.
In the quarter under review, EOG Resources’ total volume rose 15.4% year over year to 70.3 million barrels of oil equivalent (MMBoe).
Crude oil and condensate production in the quarter totaled 435.6 thousand barrels per day (MBbl/d), up 18.2% from the year-ago quarter’s level. Natural gas liquids (NGL) volumes increased 22.1% year over year to 122.8MBbl/d. Natural gas volumes increased to 1,236 million cubic feet per day (MMcf/d) from the year-earlier quarter’s level of 1,160MMcf/d.
Average price realization for crude oil and condensates rose 4.4% year over year to $59.47 per barrel. Quarterly NGL prices declined 12.6% from $26.92 in the year-ago quarter to $23.54 per barrel. Natural gas was sold at $3.42 per thousand cubic feet (Mcf), up 48.1% year over year.
Total operating cost increased to $3,451.4 million from $2,864.5 million in the year-ago quarter. Exploration expenses increased 47.6% during the quarter, while marketing costs surged 33.7%.
At the end of the fourth quarter, the company had cash and cash equivalents of $1,555.6 million and long-term debt of $5,170.2 million. This represents a debt-to-capitalization ratio of 21.1%.
During the quarter, the company generated approximately $2,066.8 million in discretionary cash flow compared with $1,541.7 million in the year-ago quarter.
For 2019, the company expects crude oil equivalent volumes in the range of 781.4-842.3 thousand barrels of oil equivalent per day. EOG projects crude oil equivalent volumes in the range of 746.1-779.2 thousand barrels of oil equivalent per day for the first quarter of 2019. Moreover, the company projects capital budget in the range of $6.1-$6.5 billion for 2019.
As of 2018, net proved reserves were 2,928 MMBoe, up 16% year over year. The company replaced 238% of its production.
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 9.05% due to these changes.
Currently, EOG Resources has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 broadly trending upward 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.