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Pioneer Natural (PXD) Q1 Earnings Beat on Permian Operations

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Pioneer Natural Resources Company (PXD - Free Report) reported first-quarter 2019 earnings of $1.83 per share, excluding one-time items, beating the Zacks Consensus Estimate of $1.61 and improving from the year-ago quarter’s $1.66.

Revenues and other income rose 12.2% year over year to $2,413 million from $2,150 million a year ago. The top line exceeded the consensus mark of $2,168 million.

The strong quarterly results were attributed to ramped-up Permian operations.

Production

Total production in the reported quarter averaged 333.4 thousand barrels of oil equivalent per day (MBOE/d), up 7% year over year. The upside can be attributed to higher activities in the Permian Basin.

Oil production averaged 206.3 thousand barrels per day (MBbl/d), up 13% year over year. Natural gas liquids (NGLs) production was marginally higher than the year-ago quarter figure. However, natural gas production amounted to 360.6 million cubic feet per day (MMcf/d) but was down from the year-ago quarter’s 378.9 MMcf/d.

Price Realization

On an oil equivalent basis, average realized price was $37.84 per barrel in the reported quarter compared with $45.11 a year ago. The company reported average realized crude price at $49.38 a barrel, down from $61.64 in the March quarter of 2018.    

Average natural gas price dropped 3.5% year over year to $2.50 per thousand cubic feet (Mcf). Natural gas liquids were sold at $22.79 a barrel, down from $27.74 a year ago.  

Cash, Debt and Capex

At the end of the quarter under review, cash balance totaled $511 million. Long-term debt summed $1,836 million, reflecting a debt-to-capitalization ratio of 15.8%.    

Guidance

Pioneer Natural continues to project production in the Permian Basin at the range of 320-335 MBOE/D for 2019. This suggests a year-over-year increase of 12% to 17%.

For the second quarter, the company projects production from the prolific play at the band of 313-328 MBOE/D.

Through 2019, the upstream energy player intends to invest capital in the range of $3.1 billion to $3.4 billion.

In February 2019, the explorer and producer hiked its semi-annual cash dividend. Further, the company intends to raise dividends to reward stock holders with an annual yield of roughly 1% per share.

Zacks Rank and Key Picks

Pioneer Natural currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space are Anadarko Petroleum Corporation (APC - Free Report) , ProPetro Holding Corp. (PUMP - Free Report) and TransCanada Corp. (TRP - Free Report) . Anadarko sports a Zacks Rank #1 (Strong Buy), while ProPetro and TransCanada hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.     

Anadarko Petroleum posted an average positive earnings surprise of 6.6% for the past four quarters.

The Zacks Consensus Estimate for Midland, TX-based ProPetro’s 2019 earnings is pegged at $2.42, indicating 21% growth over the year-ago reported figure. Next year’s forecast is $2.70, hinting at 11.5% growth.

TransCanada has beaten estimates in the last four quarters, the average being 19%.

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