We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ovintiv (OVV) Up 11.8% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Ovintiv (OVV - Free Report) . Shares have added about 11.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ovintiv 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.
Ovintiv Reports Lower-Than-Expected Q2 Earnings
Ovintiv reported second-quarter adjusted earnings per share of $2.42, missing the Zacks Consensus Estimate of $2.69. This downside in results can be attributed to a year-over-year dip in production and much higher costs. However, $2.42 was higher than the year-ago bottom line’s profit of $1.11 per share due to higher price realizations.
Total revenues of $3.74 billion beat the Zacks Consensus Estimate of $2.66 billion due to higher-than-expected total oil and natural gas liquid production. Total oil production came in at 175,000 barrels of oil equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 129,000 BOE/d. The top line improved by about 120% from the year-ago sales of $1.69 billion.
OVV’s board of directors declared a quarterly dividend of 25 cents per share for its common shareholders of record as of Sep 15, 2022, which will be paid out on Sep 30.
Production & Prices
The total second-quarter production came in at 500,000 BOE/d compared with 554,600 BOE/d in the prior-year period. The same outperformed the Zacks Consensus Estimate of 496,000 BOE/d. Lower volumes can be attributed to the natural gas production falling 11.3% year over year to 1,426 million cubic feet per day (MMcf/d), while the liquids production was down 8.5% to 262,400 BOE/d.
Ovintiv's realized natural gas price was $2.78 per thousand cubic feet compared with the year-ago level of $2.74. The realized oil price increased to $89.16 per barrel from $51.27 in the second quarter of 2021.
Costs, Capex & Balance Sheet
Total expenses in the reported quarter increased to $2.20 billion from the year-ago figure of $1.81 billion. This rise is primarily attributable to greater market optimization operating expenses.
Ovintiv’s cash from operating activities in the quarter under review summed at $1.34 billion, up from the year-ago figure of $750 million. OVV's capital investments were $511 million compared with $383 million in the year-ago period.
Ovintiv generated non-GAAP free cash flow of $713 billion in the reported quarter.
As of Jun 30, the company had cash and cash equivalents worth $8 million and long-term debt of $3.9 billion. Its debt-to-capitalization ratio was 40.1%
Guidance
Ovintiv expects capital expenditure in the $450-$500 million range for the third quarter of 2022 and between $1.7 and 1.8 billion for the full year.
For 2022, OVV now projects crude oil and condensate volumes to average between 178,000 barrels per day (bpd) and 183,000 bpd in the third quarter and between 177,000 and 180,000 bpd for the full year (180,000-185,000 before). Natural gas production is estimated in the 1,440-1,500 MMcf/d range for the third quarter and between 1,450 and 1,475 MMcf/d for the entire year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Ovintiv has a strong 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 quintile 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ovintiv has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Ovintiv (OVV) Up 11.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Ovintiv (OVV - Free Report) . Shares have added about 11.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ovintiv 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.
Ovintiv Reports Lower-Than-Expected Q2 Earnings
Ovintiv reported second-quarter adjusted earnings per share of $2.42, missing the Zacks Consensus Estimate of $2.69. This downside in results can be attributed to a year-over-year dip in production and much higher costs. However, $2.42 was higher than the year-ago bottom line’s profit of $1.11 per share due to higher price realizations.
Total revenues of $3.74 billion beat the Zacks Consensus Estimate of $2.66 billion due to higher-than-expected total oil and natural gas liquid production. Total oil production came in at 175,000 barrels of oil equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 129,000 BOE/d. The top line improved by about 120% from the year-ago sales of $1.69 billion.
OVV’s board of directors declared a quarterly dividend of 25 cents per share for its common shareholders of record as of Sep 15, 2022, which will be paid out on Sep 30.
Production & Prices
The total second-quarter production came in at 500,000 BOE/d compared with 554,600 BOE/d in the prior-year period. The same outperformed the Zacks Consensus Estimate of 496,000 BOE/d. Lower volumes can be attributed to the natural gas production falling 11.3% year over year to 1,426 million cubic feet per day (MMcf/d), while the liquids production was down 8.5% to 262,400 BOE/d.
Ovintiv's realized natural gas price was $2.78 per thousand cubic feet compared with the year-ago level of $2.74. The realized oil price increased to $89.16 per barrel from $51.27 in the second quarter of 2021.
Costs, Capex & Balance Sheet
Total expenses in the reported quarter increased to $2.20 billion from the year-ago figure of $1.81 billion. This rise is primarily attributable to greater market optimization operating expenses.
Ovintiv’s cash from operating activities in the quarter under review summed at $1.34 billion, up from the year-ago figure of $750 million. OVV's capital investments were $511 million compared with $383 million in the year-ago period.
Ovintiv generated non-GAAP free cash flow of $713 billion in the reported quarter.
As of Jun 30, the company had cash and cash equivalents worth $8 million and long-term debt of $3.9 billion. Its debt-to-capitalization ratio was 40.1%
Guidance
Ovintiv expects capital expenditure in the $450-$500 million range for the third quarter of 2022 and between $1.7 and 1.8 billion for the full year.
For 2022, OVV now projects crude oil and condensate volumes to average between 178,000 barrels per day (bpd) and 183,000 bpd in the third quarter and between 177,000 and 180,000 bpd for the full year (180,000-185,000 before). Natural gas production is estimated in the 1,440-1,500 MMcf/d range for the third quarter and between 1,450 and 1,475 MMcf/d for the entire year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Ovintiv has a strong 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 quintile 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ovintiv has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.