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W&T (WTI) Down 18.1% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for W&T Offshore (WTI - Free Report) . Shares have lost about 18.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is W&T due for a breakout? 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.
W&T Offshore reported third-quarter 2022 adjusted earnings (excluding one-time items) of 33 cents per share, beating the Zacks Consensus Estimate of 28 cents. The bottom line significantly improved from the year-ago quarter’s break-even adjusted earnings.
Total quarterly revenues of $266.5 million surpassed the Zacks Consensus Estimate of $230 million. Also, the top line jumped from $133.9 million in the prior-year quarter.
The strong quarterly results were driven by higher production and the realization of commodity prices.
Production Statistics
The total production averaged 41.5 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago quarter’s 34.8 MBoe/d.
Oil production was 1,447 thousand barrels (MBbls), up from the year-ago level of 1,083 MBbls. Natural gas liquids’ output totaled 454 MBbls, higher than 376 MBbls a year ago. Also, natural gas production of 11,499 million cubic feet (MMcf) for the reported quarter was higher than 10,481 MMcf in the year-earlier period. Of the total production for the reported quarter, 49.8% comprised liquids.
Realized Commodity Prices
The average realized price for oil in the third quarter was $90.23 a barrel, higher than the year-ago level of $68.57. The average realized price of NGL increased to $37.17 from $32.46 per barrel in the prior year. The average realized price of natural gas for the September-end quarter was $9.89 per thousand cubic feet, up from $4.31 in the last year’s comparable period. The average realized price for oil-equivalent output increased to $68.39 per barrel from $41.05 a year ago.
Operating Expenses
Lease operating expenses rose to $15.46 per Boe in the third quarter from $12.32 a year ago. Also, general and administrative expenses increased to $6.04 per Boe from $4.18 in the year-ago period.
Overall, total costs and expenses increased to $128.4 million from the year-ago level of $85.8 million.
Cash Flow
Net cash from operations for the third quarter was $89.1 million, which significantly increased from $65.1 million in the year-ago period.
Free cash flow for the reported quarter increased to $71.1 million from $8.5 million in the year-ago quarter.
Capital Spending & Balance Sheet
W&T Offshore spent $4.5 million in capital through the September-end quarter (excluding acquisitions) on oil and gas resources.
As of Sept 30, 2022, the company’s cash and cash equivalents were $447.1 million, up from the second-quarter 2022 level of $377.7 million. Its net long-term debt as of the September-end quarter was $666 million, down from the prior-quarter level of $672 million. The current portion of the long-term debt is $35.5 million.
Guidance
For the fourth quarter, W&T Offshore expects average daily oil-equivalent production of 38-42 MBoe/d. Oil production is anticipated to be 1,332-1,472 MBbls, while that of natural gas will likely be 10,676-11,800 MMcf.
The company expects lease operating expenses of $67-$73 million for the fourth quarter.
For 2022, the upstream company reduced its capital spending budget to $65-$75 million from the prior stated $70-$90 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -43.14% due to these changes.
VGM Scores
Currently, W&T 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 this revision indicates a downward shift. Notably, W&T has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
W&T belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, Cheniere Energy (LNG - Free Report) , has gained 3.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Cheniere Energy reported revenues of $8.85 billion in the last reported quarter, representing a year-over-year change of +176.6%. EPS of $7.80 for the same period compares with $0.94 a year ago.
Cheniere Energy is expected to post earnings of $4.17 per share for the current quarter, representing a year-over-year change of +456.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -9.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Cheniere Energy. Also, the stock has a VGM Score of B.
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W&T (WTI) Down 18.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for W&T Offshore (WTI - Free Report) . Shares have lost about 18.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is W&T due for a breakout? 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.
W&T Offshore Q3 Earnings & Revenues Beat Estimates
W&T Offshore reported third-quarter 2022 adjusted earnings (excluding one-time items) of 33 cents per share, beating the Zacks Consensus Estimate of 28 cents. The bottom line significantly improved from the year-ago quarter’s break-even adjusted earnings.
Total quarterly revenues of $266.5 million surpassed the Zacks Consensus Estimate of $230 million. Also, the top line jumped from $133.9 million in the prior-year quarter.
The strong quarterly results were driven by higher production and the realization of commodity prices.
Production Statistics
The total production averaged 41.5 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago quarter’s 34.8 MBoe/d.
Oil production was 1,447 thousand barrels (MBbls), up from the year-ago level of 1,083 MBbls. Natural gas liquids’ output totaled 454 MBbls, higher than 376 MBbls a year ago. Also, natural gas production of 11,499 million cubic feet (MMcf) for the reported quarter was higher than 10,481 MMcf in the year-earlier period. Of the total production for the reported quarter, 49.8% comprised liquids.
Realized Commodity Prices
The average realized price for oil in the third quarter was $90.23 a barrel, higher than the year-ago level of $68.57. The average realized price of NGL increased to $37.17 from $32.46 per barrel in the prior year. The average realized price of natural gas for the September-end quarter was $9.89 per thousand cubic feet, up from $4.31 in the last year’s comparable period. The average realized price for oil-equivalent output increased to $68.39 per barrel from $41.05 a year ago.
Operating Expenses
Lease operating expenses rose to $15.46 per Boe in the third quarter from $12.32 a year ago. Also, general and administrative expenses increased to $6.04 per Boe from $4.18 in the year-ago period.
Overall, total costs and expenses increased to $128.4 million from the year-ago level of $85.8 million.
Cash Flow
Net cash from operations for the third quarter was $89.1 million, which significantly increased from $65.1 million in the year-ago period.
Free cash flow for the reported quarter increased to $71.1 million from $8.5 million in the year-ago quarter.
Capital Spending & Balance Sheet
W&T Offshore spent $4.5 million in capital through the September-end quarter (excluding acquisitions) on oil and gas resources.
As of Sept 30, 2022, the company’s cash and cash equivalents were $447.1 million, up from the second-quarter 2022 level of $377.7 million. Its net long-term debt as of the September-end quarter was $666 million, down from the prior-quarter level of $672 million. The current portion of the long-term debt is $35.5 million.
Guidance
For the fourth quarter, W&T Offshore expects average daily oil-equivalent production of 38-42 MBoe/d. Oil production is anticipated to be 1,332-1,472 MBbls, while that of natural gas will likely be 10,676-11,800 MMcf.
The company expects lease operating expenses of $67-$73 million for the fourth quarter.
For 2022, the upstream company reduced its capital spending budget to $65-$75 million from the prior stated $70-$90 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -43.14% due to these changes.
VGM Scores
Currently, W&T 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 this revision indicates a downward shift. Notably, W&T has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
W&T belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, Cheniere Energy (LNG - Free Report) , has gained 3.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Cheniere Energy reported revenues of $8.85 billion in the last reported quarter, representing a year-over-year change of +176.6%. EPS of $7.80 for the same period compares with $0.94 a year ago.
Cheniere Energy is expected to post earnings of $4.17 per share for the current quarter, representing a year-over-year change of +456.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -9.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Cheniere Energy. Also, the stock has a VGM Score of B.