A month has gone by since the last earnings report for Pioneer Natural Resources . Shares have added about 32.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pioneer Natural Resources due for a pullback? 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 catalysts.
Pioneer Misses Q3 Earnings Estimates on Lower Crude Output
Pioneer Natural Resources’ third-quarter 2020 earnings per share of 17 cents, excluding one-time items, missed the Zacks Consensus Estimate of 18 cents. In the year-ago quarter, the company reported a profit of $1.99 per share.
Revenues and other income declined year over year to $1,815 million from $2,325 million a year ago. However, the top line beat the consensus mark of $1,495 million.
The company reported lower-than-expected earnings due to reduced crude oil production volumes and realized prices. This was partially offset by higher natural gas and natural gas liquids (NGLs) production, and their respective realized prices. Decreased oil and gas production expenses also boosted the profit levels.
Production
Total production for the reported quarter was 355 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago figure of 350.7 MBoe/d.
Oil production was 200.7 thousand barrels per day (MBbls/d), down from the year-ago quarter’s 215.2 MBbls/d. NGLs production was 82.6 MBbls/d compared with the year-ago quarter’s 74.8 MBbls/d. Moreover, natural gas production amounted to 430.1 million cubic feet per day (MMcf/d), up from the year-ago quarter’s 364.2 MMcf/d.
The company is likely to permanently stop the majority of its 5.5 MBbls/d of oil output from vertical wells as the weak crude price environment makes the assets uneconomical.
Price Realization
On an oil-equivalent basis, average realized price was $28.22 per barrel for the reported quarter compared with $38.28 a year ago. The company reported average realized crude price of $39.22 a barrel, down from $53.93 in the September quarter of 2019.
Average natural gas price improved to $1.74 per thousand cubic feet (Mcf) from $1.54 in the prior-year quarter. Moreover, natural gas liquids were sold at $16.93 a barrel, marginally up from $16.81 a year ago.
Operating Costs
The company’s expenses for oil and gas production were $163 million, down from $227 million in the year-ago quarter. As such, total costs and expenses decreased to $1,831 million for the third quarter from $2,022 million in the year-ago period.
Cash, Debt and Capex
At the end of the quarter under review, cash balance totaled $1,325 million, up from $180 million at second quarter-end. Long-term debt summed $3,148 million, up from $2,054 million at the end of the second-quarter. It had a debt to capitalization of 22%. The current portion of the long-term debt was $140 million.
During the September quarter of 2020, the company spent $291 million.
Guidance
Pioneer maintained its 2020 capital budget in the range of $1.4-$1.6 billion.
For fourth-quarter 2020, the company expects daily oil equivalent production in the range of 355-370 MBoe/d. For 2020, Pioneer Natural upwardly revised its oil equivalent production volumes guidance to 365-369 MBoe/d.
For shareholders, the company has planned a total of 10% annual return.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -9.86% due to these changes.
VGM Scores
Currently, Pioneer Natural Resources has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Pioneer Natural Resources has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Pioneer Natural Resources (PXD) Up 32.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Pioneer Natural Resources . Shares have added about 32.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pioneer Natural Resources due for a pullback? 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 catalysts.
Pioneer Misses Q3 Earnings Estimates on Lower Crude Output
Pioneer Natural Resources’ third-quarter 2020 earnings per share of 17 cents, excluding one-time items, missed the Zacks Consensus Estimate of 18 cents. In the year-ago quarter, the company reported a profit of $1.99 per share.
Revenues and other income declined year over year to $1,815 million from $2,325 million a year ago. However, the top line beat the consensus mark of $1,495 million.
The company reported lower-than-expected earnings due to reduced crude oil production volumes and realized prices. This was partially offset by higher natural gas and natural gas liquids (NGLs) production, and their respective realized prices. Decreased oil and gas production expenses also boosted the profit levels.
Production
Total production for the reported quarter was 355 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago figure of 350.7 MBoe/d.
Oil production was 200.7 thousand barrels per day (MBbls/d), down from the year-ago quarter’s 215.2 MBbls/d. NGLs production was 82.6 MBbls/d compared with the year-ago quarter’s 74.8 MBbls/d. Moreover, natural gas production amounted to 430.1 million cubic feet per day (MMcf/d), up from the year-ago quarter’s 364.2 MMcf/d.
The company is likely to permanently stop the majority of its 5.5 MBbls/d of oil output from vertical wells as the weak crude price environment makes the assets uneconomical.
Price Realization
On an oil-equivalent basis, average realized price was $28.22 per barrel for the reported quarter compared with $38.28 a year ago. The company reported average realized crude price of $39.22 a barrel, down from $53.93 in the September quarter of 2019.
Average natural gas price improved to $1.74 per thousand cubic feet (Mcf) from $1.54 in the prior-year quarter. Moreover, natural gas liquids were sold at $16.93 a barrel, marginally up from $16.81 a year ago.
Operating Costs
The company’s expenses for oil and gas production were $163 million, down from $227 million in the year-ago quarter. As such, total costs and expenses decreased to $1,831 million for the third quarter from $2,022 million in the year-ago period.
Cash, Debt and Capex
At the end of the quarter under review, cash balance totaled $1,325 million, up from $180 million at second quarter-end. Long-term debt summed $3,148 million, up from $2,054 million at the end of the second-quarter. It had a debt to capitalization of 22%. The current portion of the long-term debt was $140 million.
During the September quarter of 2020, the company spent $291 million.
Guidance
Pioneer maintained its 2020 capital budget in the range of $1.4-$1.6 billion.
For fourth-quarter 2020, the company expects daily oil equivalent production in the range of 355-370 MBoe/d. For 2020, Pioneer Natural upwardly revised its oil equivalent production volumes guidance to 365-369 MBoe/d.
For shareholders, the company has planned a total of 10% annual return.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -9.86% due to these changes.
VGM Scores
Currently, Pioneer Natural Resources has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Pioneer Natural Resources has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.