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Range Resources (RRC) Q4 Earnings Beat Estimates, Fall Y/Y

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Range Resources Corporation (RRC - Free Report) posted fourth-quarter 2019 adjusted earnings of 8 cents per share, beating the Zacks Consensus Estimate of a break even. However, the bottom line declined from the year-ago quarter’s 21 cents.

In the fourth quarter, total revenues amounted to $606 million, missing the Zacks Consensus Estimate of $639 million. Moreover, the top line deteriorated from the prior-year quarter’s $1,072.6 million.

The better-than-expected earnings were supported by higher natural gas equivalent production volumes. This was partially offset by lower price realizations of commodities.

Range Resources Corporation Price, Consensus and EPS Surprise

 

Range Resources Corporation Price, Consensus and EPS Surprise

Range Resources Corporation price-consensus-eps-surprise-chart | Range Resources Corporation Quote

Operational Performance

During the fourth quarter, the company’s production averaged 2,345.2 million cubic feet equivalent per day (MMcfe/d), up 9% from the prior-year quarter. Natural gas contributed almost 70% to total production, while natural gas liquid (NGL) and oil accounted for the remaining.

Oil and NGL production increased 5% and 6%, respectively, on a year-over-year basis. Moreover, natural gas production increased 11%.

The company’s total price realization (including derivative settlements and after third-party transportation costs) averaged $1.37 per thousand cubic feet equivalent (Mcfe), down 26% year over year.

While natural gas price declined 21% on a year-over-year basis to $1.24 per thousand cubic feet, NGL and oil prices dropped 45% and 2%, respectively.

Expenses

The exploration cost declined to $9.2 million from the prior-year number of $10.2 million. Moreover, direct operating costs contracted to $33.3 million from the year-ago $34.9 million.

Capital Expenditure & Financials

The company incurred drilling and completion expenditures worth $126 million in the reported quarter. At the end of the fourth quarter, the company had long-term debt of $3,172.9 million, with a debt-to-capitalization ratio of 57.5%.  

Guidance

For 2020, the company expects production volumes of 2.3 billion cubic feet equivalent per day (Bcfe/D), almost the same as 2019 production volumes.

The company expects 2020 capital expenditure of $520 million, lower than $728 million in 2019. Notably, 94% of the total capital budget will be allocated for drilling and recompletions.

Zacks Rank & Stocks to Consider

Range Resources currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better ranked players in the energy sector are Marathon Oil Corporation (MRO - Free Report) , Chevron Corporation (CVX - Free Report) and Hess Corporation (HES - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Marathon Oil is likely to see earnings growth of 7.8% in the next five years, higher that the industry’s 7%.

Chevron’s bottom line for 2020 is likely to rise 12.8% year over year.

Hess’ bottom line for 2020 is expected to climb 93.7% year over year.

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