A month has gone by since the last earnings report for Pioneer Natural Resources (PXD - Free Report) . Shares have lost about 9.1% 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 Misses Q3 Earnings & Revenue Estimates
Pioneer Natural Resourcesreported third-quarter 2019 earnings per share of $1.99, excluding one-time items, lagging the Zacks Consensus Estimate of $2.02. Further, the bottom line dipped from the year-ago quarter’s $2.07.
Revenues and other income declined 6.1% year over year to $2,325 million from $2,476 million a year ago. Moreover, the top line missed the consensus mark of $2,421 million.
The company reported weak quarterly results, owing to lower average realized prices on an oil equivalent basis. This was partly offset by higher activities in the Permian Basin.
During the third quarter of 2019, the explorer bought back $200 million of shares as part of its $2-billion repurchase program. As of Nov 4, the company repurchased $728 million worth of shares under the authorized buyback plan.
Total production in the reported quarter was 350.7 thousand barrels of oil equivalent per day (MBOE/d), up 9.4% year over year. The upside can be attributed to higher activities in the Permian Basin.
Oil production was 215.2 thousand barrels per day (MBbl/d), up 10.3% year over year. Natural gas liquids (NGLs) production of 74.8 MBbl/d was higher than the year-ago quarter’s 62.6 MBbl/d. However, natural gas production amounted to 364.2 million cubic feet per day (MMcf/d) and was down from the year-ago quarter’s 377.6 MMcf/d.
On an oil equivalent basis, average realized price was $38.28 per barrel in the reported quarter compared with $44.64 a year ago. The company reported average realized crude price of $53.93 a barrel, down from $57.54 in the September-end quarter of 2018.
Average natural gas price dropped 30.3% year over year to $1.54 per thousand cubic feet (Mcf). Natural gas liquids were sold at $16.81 a barrel, down from $35.97 a year ago.
Cash, Debt and Capex
At the end of the quarter under review, cash balance totaled $437 million. Long-term debt summed $1,838 million, reflecting a debt-to-capitalization ratio of 16.2%.
During the September-end quarter, the company spent $665 million for operations in the Permian Basin, which includes expenditure for gas processing and water infrastructure.
Pioneer Natural lowered the top end of its 2019 capital budget by an additional 5%. Despite lowering capital spending, the company managed to increase the mid-point of 2019 production guidance, suggesting strong operational efficiencies.
For 2019, the upstream energy player recently revised the capital budget to $3.05-$3.10 billion. Notably, Pioneer Natural now expects production of 336-340 MBOE/D from the Permian Basin for 2019.
For the December-end quarter, the company projects production of 345-360 MBOE/D.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
At this time, Pioneer Natural Resources has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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.
Estimates have been trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Pioneer Natural Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.