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WPX Energy (WPX) Q3 Earnings Lag Estimates, Revenues Beat

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WPX Energy Inc.’s (WPX - Free Report) third-quarter 2019 earnings of 9 cents per share missed the Zacks Consensus Estimate of 11 cents by 18.2%. However, the bottom line increased from 7 cents per share reported in the year-ago quarter.

The company reported third-quarter GAAP earnings of 29 cents against a loss of 1 cent in the year-ago period. The difference between GAAP and operating earnings in the reported quarter was due to a one-time gain on derivatives marginally offset  by loss on extinguishment of debts and taxes.

Total Revenues

WPX Energy’s quarterly revenues of $795 million beat the Zacks Consensus Estimate of $637 million by 24.8% and improved 64.3% from the year-ago figure of $484 million. The improvement in revenues was due to higher contribution from oil sales.

WPX Energy, Inc. Price, Consensus and EPS Surprise

WPX Energy, Inc. Price, Consensus and EPS Surprise

WPX Energy, Inc. price-consensus-eps-surprise-chart | WPX Energy, Inc. Quote

Highlights of the Release

Total production in the third quarter was 173.4 thousand barrels of oil equivalent per day (Mboe/d), up 40% year over year. Liquids volumes accounted for nearly 78% of total production, reflecting the company’s increasing focus on oil.

Oil production in the quarter was 108.6 thousand barrels per day, which was nearly 30.2% higher than the year-ago level, courtesy of 10% and 51% growth in volumes in Delaware and Williston basins, respectively, over the past 12 months.

Total expenses were $553 million, up 20.7% from $458 million in the year-ago quarter.

Interest expenses in the reported quarter were $38 million, in line with the year-ago figure.

The company initiated a program to repurchase up to $400 million shares in the next 24 months, which will further increase WPX Energy’s shareholder value. To date, the company has repurchased $58 million shares of its common stock at an average price of $10.16 per share, retiring 5.7 million shares.

Realized Prices & Hedges

Realized oil prices in the quarter were $53.92 per barrel, down 17.7% from the year-ago level.

Realized natural gas prices were 77 cents per thousand cubic feet, down 36.9% from a year ago. Realized prices for natural gas liquids were down 59.8% from the year-ago quarter to $10.73 per barrel. Substantial decline in hydrocarbon prices did not allow the company to enjoy full benefits from increase in total production.

For the remainder of 2019, WPX Energy has 83,000 bbl/d of oil hedged at a weighted average price of $56.72 per barrel. The company also has 110,000 million British thermal units (MMBtu) per day of natural gas hedged at a weighted average price of $3.07 per MMBtu.

Financial Update

Cash and cash equivalents of WPX Energy on Sep 30, 2019 were $13 million compared with $3 million as of Dec 31, 2018.

Its long-term debt on Sep 30, 2019 was $2,201 million, down from $2,485 million at the end of 2018.
 
Net cash from operating activities in the first nine months of 2019 was $906 million compared with $652 million in the comparable year-ago period. During the first nine months of 2019, capital expenditure was $1,090 million compared with $1,013 million in the comparable prior-year period.
 
Guidance

Taking into consideration strong production in the first nine months of the year, WPX Energy made an upward revision in its total production guidance for 2019 to 162-167 Mboe/d from the prior guided range of 160-165 Mboe/d.

The company now expects 2019 oil production in the range of 102-104 thousand barrels per day (Mbbl/d) versus prior guidance of 101-103 Mbbl/d. WPX Energy expects fourth-quarter oil volumes within 109-111 Mbbl/d.

Capital expenditure for 2019 is expected in the range of $1,125-$1,250 million.

Zacks Rank

Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

Apache Corporation (APA - Free Report) reported third-quarter 2019 loss per share — excluding one-time items — of 29 cents, wider than the Zacks Consensus Estimate of a loss of 27 cents.

CNX Resources Corporation (CNX - Free Report) reported third-quarter 2019 adjusted loss of 6 cents per share, which is narrower than the Zacks Consensus Estimate of a loss of 9 cents.

Transocean Ltd. (RIG - Free Report) posted third-quarter 2019 adjusted loss of 38 cents a share, narrower than the Zacks Consensus Estimated of a loss of 40 cents.

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