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What's in the Offing for Cabot Oil & Gas (COG) Q4 Earnings?

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Cabot Oil & Gas Corporation COG is set to release fourth-quarter 2019 results on Thursday Feb 20, after the closing bell.

The current Zacks Consensus Estimate for the to-be-reported quarter is pegged at earnings of 30 cents per share on expected revenues of $478 million. There has been no change in estimates for the bottom line over the past 30 days.

Let’s delve into the factors that might have impacted the company’s December-quarter performance.

Factors Likely to Impact Q4 Results

Cabot Oil & Gas is focused on high-impact natural gas-driven drilling. As a result, its acreage in the Marcellus shale play is expected to have placed it well for significant output growth in the to-be-reported quarter.

The companyrecently provided an update on its guidance for fourth-quarter operational results. Management stated that its average production for the period under review is estimated to be higher than the upper end of its earlier projected range, which was in the range of 2,375-2,425 million cubic feet of oil equivalent per day (Mmcfe/d). While its revised production is anticipated to be 2,457 Mmcfe/d, suggesting a rise from the year-ago reported figure of 2,243 Mmcfe/d.

The Zacks Consensus Estimate for fourth-quarter total production is pegged at 223 billion cubic feet (Bcf), indicating an 8.25% increase from 206 Bcf a year ago. Investors should know that the company’s total production comprises 100% natural gas.

However, the Zacks Consensus Estimate for average natural gas price realization (including the impact of its hedging program) for the to-be-reported quarter stands at $2.13 per thousand cubic feet, implying a 31.5% decrease from $3.11 reported a year earlier. Also, this independent gas exploration player expects its realized natural gas price (including the impact of derivates) for the fourth quarter to be $2.15 per thousand cubic feet (Mcf). This bearish outlook might in turn, affect the company’s impending quarterly results.

What Does Our Model Say?

The proven Zacks model does not conclusively predict an earnings beat for Cabot Oil & Gas this time around. The right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Cabot Oil & Gas has an Earnings ESP of +0.70%.

Zacks Rank: Cabot Oil & Gas carries a Zacks Rank #5 (Strong Sell).

The above combination leaves surprise prediction inconclusive.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, Cabot Oil & Gas Corporation reported net income per share (adjusted for special items) of 29 cents, surpassing the Zacks Consensus Estimate of 27 cents and also the year-ago figure of 25 cents.

The strong results can be attributed to lower costs and slightly higher-than-anticipated production. Precisely, the company’s production came in at 220.7 billion cubic feet equivalent (Bcfe), just ahead of the Zacks Consensus Estimate of 219 Bcfe.

But the company’s quarterly revenues of $429.1 million missed the Zacks Consensus Estimate of $455 million as natural gas prices fell. Further, this reported figure was below the prior-year quarter’s revenues of $545.2 million.

As far as earnings record is concerned, this Houston-based company’s bottom line outpaced the Zacks Consensus Estimate in three of the trailing four quarters, missing the mark in one. The average positive surprise is 5.07%. This is depicted in the graph below:

Stocks to Consider

Here are some stocks worth considering from the energy space, which per our model have the perfect combination of elements to beat on earnings this reporting cycle:

Noble Corporation (NE - Free Report) has an Earnings ESP of +7.26% and a Zacks Rank #3. The company is slated to announce fourth-quarter 2019 earnings on Feb 19.

Williams Companies, Inc. WMB has an Earnings ESP of +6.78% and is Zacks #3 Ranked. The company is slated to announce fourth-quarter 2019 earnings on Feb 19.

Energy Transfer, L.P. ET has an Earnings ESP of +19.42% and is a #3 Ranked stock. The partnership is slated to release fourth-quarter earnings on Feb 19. You can see the complete list of today’s Zacks #1 Rank stocks here.

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