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Why Is Viper Energy (VNOM) Up 4.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Viper Energy Partners (VNOM - Free Report) . Shares have added about 4.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Viper Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Viper Energy Q1 Earnings Miss, Beats Revenue Estimates
Viper Energy reported an adjusted loss per unit of 8 cents for the first quarter against the Zacks Consensus Estimate of a profit of 6 cents. Moreover, the bottom line significantly declined from the year-ago profit of 21 cents per share.
The partnership — with mineral interests in North America oil and gas resources — generated operating income of $97 million, beating the Zacks Consensus Estimate of $83 million. Also, the top line increased from the year-ago quarter’s $78.7 million.
The weak first-quarter earnings can be attributed to a decline in oil-equivalent production volumes and higher expenses. These were partially offset by higher commodity price realizations.
Distribution
The partnership was authorized by the board of directors of its general partner to make a cash distribution of 25 cents per common unit, payable May 20, 2021, to all its shareholders of record as of May 13, 2021. Notably, the metric increased 78.6% from the prior-quarter figure of 14 cents per common unit.
Production
The resources, wherein the partnership has mineral interests, produced 2,346 thousand oil equivalent barrels (MBoe) for the March-end quarter of 2021, down from 2,509 MBoe in the year-ago quarter. Of the total volumes, oil contributed 59.5% to total production. The production of crude oil and natural gas liquids fell from the prior-year quarter figure. However, the production of natural gas rose from the year-ago level in the reported quarter.
Realized Prices
Overall average realized price per barrel of oil equivalent was recorded at $41.14 compared with $30.62 in first-quarter 2020. Average realized oil prices for the quarter under review were recorded at $56.16 per barrel, up from $45.49 a year ago. Moreover, the price of natural gas was $2.77 per thousand cubic feet, up from 13 cents in the year-ago quarter. Notably, the same for natural gas liquids was recorded at $22.42 a barrel, up from the year-ago quarter’s $8.94.
Cost & Expenses
Total expenses for first-quarter 2021 amounted to $33.8 million versus $33.5 million in the prior-year quarter. On a per barrel of oil equivalent (Boe) basis, total operating expenses were recorded at $3.64 versus $3.36 in the year-ago quarter.
Cash Flow
Net cash from operating activities was recorded at $54.7 million, down from $96.1 million in the first quarter of 2020. Despite the current market uncertainties, the partnership expects to generate more cash from operations in the coming days, supported by favorable hedges.
Balance Sheet
As of Mar 31, 2021, Viper Energy’s cash and cash equivalents were at $11.7 million. It reported net long-term debt of $528.9 million, representing a debt to capitalization of 22.2%.
Guidance
For 2021, the company expects daily average oil equivalent production of 25-27 thousand barrels of oil equivalent per day (MBoe/d), representing an increase from the previously mentioned 24.5-26.5 MBoe/d.
Moreover, the partnership sets its average daily production guidance for the second and third quarters of 2021 between 25 Mboe/d and 26.5 Mboe/d.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -8.51% due to these changes.
VGM Scores
Currently, Viper Energy has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Viper Energy has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Viper Energy (VNOM) Up 4.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Viper Energy Partners (VNOM - Free Report) . Shares have added about 4.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Viper Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Viper Energy Q1 Earnings Miss, Beats Revenue Estimates
Viper Energy reported an adjusted loss per unit of 8 cents for the first quarter against the Zacks Consensus Estimate of a profit of 6 cents. Moreover, the bottom line significantly declined from the year-ago profit of 21 cents per share.
The partnership — with mineral interests in North America oil and gas resources — generated operating income of $97 million, beating the Zacks Consensus Estimate of $83 million. Also, the top line increased from the year-ago quarter’s $78.7 million.
The weak first-quarter earnings can be attributed to a decline in oil-equivalent production volumes and higher expenses. These were partially offset by higher commodity price realizations.
Distribution
The partnership was authorized by the board of directors of its general partner to make a cash distribution of 25 cents per common unit, payable May 20, 2021, to all its shareholders of record as of May 13, 2021. Notably, the metric increased 78.6% from the prior-quarter figure of 14 cents per common unit.
Production
The resources, wherein the partnership has mineral interests, produced 2,346 thousand oil equivalent barrels (MBoe) for the March-end quarter of 2021, down from 2,509 MBoe in the year-ago quarter. Of the total volumes, oil contributed 59.5% to total production. The production of crude oil and natural gas liquids fell from the prior-year quarter figure. However, the production of natural gas rose from the year-ago level in the reported quarter.
Realized Prices
Overall average realized price per barrel of oil equivalent was recorded at $41.14 compared with $30.62 in first-quarter 2020. Average realized oil prices for the quarter under review were recorded at $56.16 per barrel, up from $45.49 a year ago. Moreover, the price of natural gas was $2.77 per thousand cubic feet, up from 13 cents in the year-ago quarter. Notably, the same for natural gas liquids was recorded at $22.42 a barrel, up from the year-ago quarter’s $8.94.
Cost & Expenses
Total expenses for first-quarter 2021 amounted to $33.8 million versus $33.5 million in the prior-year quarter. On a per barrel of oil equivalent (Boe) basis, total operating expenses were recorded at $3.64 versus $3.36 in the year-ago quarter.
Cash Flow
Net cash from operating activities was recorded at $54.7 million, down from $96.1 million in the first quarter of 2020. Despite the current market uncertainties, the partnership expects to generate more cash from operations in the coming days, supported by favorable hedges.
Balance Sheet
As of Mar 31, 2021, Viper Energy’s cash and cash equivalents were at $11.7 million. It reported net long-term debt of $528.9 million, representing a debt to capitalization of 22.2%.
Guidance
For 2021, the company expects daily average oil equivalent production of 25-27 thousand barrels of oil equivalent per day (MBoe/d), representing an increase from the previously mentioned 24.5-26.5 MBoe/d.
Moreover, the partnership sets its average daily production guidance for the second and third quarters of 2021 between 25 Mboe/d and 26.5 Mboe/d.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -8.51% due to these changes.
VGM Scores
Currently, Viper Energy has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Viper Energy has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.