A month has gone by since the last earnings report for Callon Petroleum . Shares have added about 10% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Callon 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.
Callon Q4 Earnings Miss Estimates
Callon reported fourth-quarter adjusted earnings of $2.66 per share, missing the Zacks Consensus Estimate of $2.81. However, the bottom line significantly rose from earnings of $1 per share a year ago.
Operating revenues of $692.2 million beat the Zacks Consensus Estimate of $526 million. The top line also increased from the year-ago quarter’s $296 million.
The lower-than-expected earnings can be attributed to higher lease operating expenses. The negatives were partially offset by increased production volumes and higher commodity price realizations.
Production
For the quarter, Callon’s net production volumes averaged 112,365 Boe/d, up from the year-ago period’s 94,914 Boe/d. Production volumes increased in the Permian Basin, while the same in Eagle Ford declined from the year-ago quarter. Of the total fourth-quarter production, 64% was oil.
Callon’s oil production for the quarter was 6,566 thousand barrels (MBbls), up from the year-ago level of 5,425 MBbls. Natural gas production increased to 11,273 million cubic feet (MMcf) from 9,738 MMcf in fourth-quarter 2020. Also, natural gas liquids (NGLs) production for the quarter under review was recorded at 1,893 MBbls, up from the year-ago figure of 1,684 MBbls.
Price Realizations (Without Impacts of Cash-Settled Derivatives)
The average realized price per barrel of oil equivalent was $61.22. The figure increased from the year-ago quarter’s $30.57 a barrel. The average realized price for oil was $77.13 per barrel compared with $41.06 a year ago. Meanwhile, the average realized price for natural gas was $5.03 per thousand cubic feet, up from $1.91 in the prior-year quarter. The average realized price per barrel for NGLs was $36.86, higher than the year-ago level of $15.24.
Total Expenses
Callon’s total operating expenses of $327.8 million declined from the year-ago level of $1,010.1 million. The year-ago figure includes an impairment charge of $585.8 million.
Total lease operating costs increased to $73.5 million from the year-ago level of $45 million. Yet, the company’s per-unit lease operating expenses increased to $7.11 per Boe for the reported quarter from $5.15 a year ago.
Capital Expenditure & Balance Sheet
Capital expenditure for the reported quarter was $151 million. Callon generated an adjusted free cash flow of $123.6 million, up from $24.4 million a year ago.
As of Dec 31, 2021, the company’s total cash and cash equivalents amounted to $9.9 million, increasing from $3.7 million at the third-quarter end. Long-term debt totaled $2,694.1 million, down from $2,809.6 million in the previous quarter. It had a total debt to capitalization of 59.1%.
Outlook
For 2022, Callon expects total production of 101-105 thousand barrels of oil equivalent per day. Of the total, 64% will likely be crude oil.
The company projects its operational capital budget at $725 million, of which 85% will be allocated to the Permian Basin. Moreover, it expects to generate an adjusted free cash flow of more than $500 million for the year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Callon has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Outlook
Callon has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Callon (CPE) Up 10% Since Last Earnings Report?
A month has gone by since the last earnings report for Callon Petroleum . Shares have added about 10% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Callon 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.
Callon Q4 Earnings Miss Estimates
Callon reported fourth-quarter adjusted earnings of $2.66 per share, missing the Zacks Consensus Estimate of $2.81. However, the bottom line significantly rose from earnings of $1 per share a year ago.
Operating revenues of $692.2 million beat the Zacks Consensus Estimate of $526 million. The top line also increased from the year-ago quarter’s $296 million.
The lower-than-expected earnings can be attributed to higher lease operating expenses. The negatives were partially offset by increased production volumes and higher commodity price realizations.
Production
For the quarter, Callon’s net production volumes averaged 112,365 Boe/d, up from the year-ago period’s 94,914 Boe/d. Production volumes increased in the Permian Basin, while the same in Eagle Ford declined from the year-ago quarter. Of the total fourth-quarter production, 64% was oil.
Callon’s oil production for the quarter was 6,566 thousand barrels (MBbls), up from the year-ago level of 5,425 MBbls. Natural gas production increased to 11,273 million cubic feet (MMcf) from 9,738 MMcf in fourth-quarter 2020. Also, natural gas liquids (NGLs) production for the quarter under review was recorded at 1,893 MBbls, up from the year-ago figure of 1,684 MBbls.
Price Realizations (Without Impacts of Cash-Settled Derivatives)
The average realized price per barrel of oil equivalent was $61.22. The figure increased from the year-ago quarter’s $30.57 a barrel. The average realized price for oil was $77.13 per barrel compared with $41.06 a year ago. Meanwhile, the average realized price for natural gas was $5.03 per thousand cubic feet, up from $1.91 in the prior-year quarter. The average realized price per barrel for NGLs was $36.86, higher than the year-ago level of $15.24.
Total Expenses
Callon’s total operating expenses of $327.8 million declined from the year-ago level of $1,010.1 million. The year-ago figure includes an impairment charge of $585.8 million.
Total lease operating costs increased to $73.5 million from the year-ago level of $45 million. Yet, the company’s per-unit lease operating expenses increased to $7.11 per Boe for the reported quarter from $5.15 a year ago.
Capital Expenditure & Balance Sheet
Capital expenditure for the reported quarter was $151 million. Callon generated an adjusted free cash flow of $123.6 million, up from $24.4 million a year ago.
As of Dec 31, 2021, the company’s total cash and cash equivalents amounted to $9.9 million, increasing from $3.7 million at the third-quarter end. Long-term debt totaled $2,694.1 million, down from $2,809.6 million in the previous quarter. It had a total debt to capitalization of 59.1%.
Outlook
For 2022, Callon expects total production of 101-105 thousand barrels of oil equivalent per day. Of the total, 64% will likely be crude oil.
The company projects its operational capital budget at $725 million, of which 85% will be allocated to the Permian Basin. Moreover, it expects to generate an adjusted free cash flow of more than $500 million for the year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Callon has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Outlook
Callon has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.