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Coterra (CTRA) Q2 Earnings Down Y/Y, Sales Lag Estimates
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Coterra Energy Inc. (CTRA - Free Report) reported second-quarter 2024 adjusted earnings per share of 35 cents, which missed the Zacks Consensus Estimate of 40 cents. The bottom line also declined from the year-ago quarter’s level of 38 cents per share. The year-over-year underperformance was due to weaker natural gas realizations and a 7.4% increase in operating expenses.
This oil and gas exploration and production firm’s operating revenues of $1.3 billion missed the Zacks Consensus Estimate by $75 million. However, the figure increased 7.3% from the year-ago level of $1.2 billion, driven by a higher contribution from oil revenues.
Coterra Energy's board of directors approved a quarterly base dividend of 21 cents per share, payable on Aug 29, 2024, to its shareholders of record as of Aug 15.
In the quarter, the company bought back 5 million shares for $140 million (on a cash basis, excluding the 1% excise tax) at a weighted average price of approximately $27.72 per share. As of Jun 30, 2024, $1.3 billion remained on its $2 billion share repurchase authorization.
In the quarter, the company delivered total shareholder returns of $295 million, which included $155 million in declared dividends and $140 million in share repurchases (on a cash basis, excluding the 1% excise tax). CTRA returned 120% of free cash flow (non-GAAP) to its shareholders.
Coterra Energy Inc. Price, Consensus and EPS Surprise
The average second-quarter daily production increased 0.6% from the year-ago level to 669.2 thousand barrels of oil equivalent (Mboe). The figure also surpassed the Zacks Consensus Estimate of 652 Mboe.
The daily production of natural gas decreased 4.3% year over year to 2,779.8 million cubic feet (Mmcf) per day. Oil production rose 11.9% to 107.2 thousand barrels (MBbl) per day, and natural gas liquids (NGL) production increased 16.2% to 98.8 MBbl/day in the quarter under review.
The average sales price for crude oil was $79.37 per barrel, indicating a 10.4% increase from the prior-year level of $71.88. The figure was marginally higher than the consensus mark of $79 per barrel.
The average realized natural gas price was $1.40 per thousand cubic feet compared with $1.95 in the year-earlier period. Additionally, the figure was lower than the consensus estimate of $1.47 per thousand cubic feet.
The average realized NGL was $19.53 per thousand cubic feet compared with $16.67 in the year-earlier period. However, the figure was also lower than the consensus estimate of $20.46 per thousand cubic feet.
Costs & Expenses
In the quarter under discussion, the average unit cost rose to $16.26 per barrel of oil equivalent from the previous year's $15.15. This improvement was due to Coterra's depreciation expenses, which increased by 12.2% year over year on a per-barrel basis. Additionally, total operating expenses of $976 million increased from the year-ago quarter’s $909 million.
Financial Position
Cash flow from operations went down 13.6% to $558 million, while CTRA’s cash capital expenditure for drilling and development totaled $479 million. The company’s free cash flow for the quarter amounted to $246 million.
As of Jun 30, 2024, the company had $1.1 billion in cash and cash equivalents. Coterra Energy had a long-term debt (including the current portion) of $2.1 billion as of the same date, indicating a debt-to-capitalization of 16.9%.
Guidance
Coterra has reaffirmed its capital expenditure budget at $1.75 billion to $1.95 billion (non-GAAP) while significantly increasing its oil production estimate to 105.5-108.5 thousand barrels of oil per day (MBopd).
Natural gas production is expected to remain steady, with a narrower range of 2,675-2,775 million cubic feet per day (MMcfpd). These increases are expected to boost total oil and gas equivalent production between 645 MBoepd and 675 MBoepd.
For the third quarter of 2024, the company anticipates producing 620-650 MBoepd, with oil production ranging from 107.0-111.0 MBopd and natural gas production between 2,500 MMcfpd and 2,630 MMcfpd. Capital expenditures for the quarter are estimated at $450-$530 million (non-GAAP).
Based on projected oil and gas prices, the company expects a robust financial performance with $3.2 billion in discretionary cash flow (non-GAAP) and $1.3 billion in free cash flow (non-GAAP) for the year.
Coterra Energy remains dedicated to returning 50% or more of its annual free cash flow (non-GAAP) to the company’s shareholders through a $0.84 per share annual dividend and share repurchases.
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and higher than the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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Coterra (CTRA) Q2 Earnings Down Y/Y, Sales Lag Estimates
Coterra Energy Inc. (CTRA - Free Report) reported second-quarter 2024 adjusted earnings per share of 35 cents, which missed the Zacks Consensus Estimate of 40 cents. The bottom line also declined from the year-ago quarter’s level of 38 cents per share. The year-over-year underperformance was due to weaker natural gas realizations and a 7.4% increase in operating expenses.
This oil and gas exploration and production firm’s operating revenues of $1.3 billion missed the Zacks Consensus Estimate by $75 million. However, the figure increased 7.3% from the year-ago level of $1.2 billion, driven by a higher contribution from oil revenues.
Coterra Energy's board of directors approved a quarterly base dividend of 21 cents per share, payable on Aug 29, 2024, to its shareholders of record as of Aug 15.
In the quarter, the company bought back 5 million shares for $140 million (on a cash basis, excluding the 1% excise tax) at a weighted average price of approximately $27.72 per share. As of Jun 30, 2024, $1.3 billion remained on its $2 billion share repurchase authorization.
In the quarter, the company delivered total shareholder returns of $295 million, which included $155 million in declared dividends and $140 million in share repurchases (on a cash basis, excluding the 1% excise tax). CTRA returned 120% of free cash flow (non-GAAP) to its shareholders.
Coterra Energy Inc. Price, Consensus and EPS Surprise
Coterra Energy Inc. price-consensus-eps-surprise-chart | Coterra Energy Inc. Quote
Production & Price Realizations
The average second-quarter daily production increased 0.6% from the year-ago level to 669.2 thousand barrels of oil equivalent (Mboe). The figure also surpassed the Zacks Consensus Estimate of 652 Mboe.
The daily production of natural gas decreased 4.3% year over year to 2,779.8 million cubic feet (Mmcf) per day. Oil production rose 11.9% to 107.2 thousand barrels (MBbl) per day, and natural gas liquids (NGL) production increased 16.2% to 98.8 MBbl/day in the quarter under review.
The average sales price for crude oil was $79.37 per barrel, indicating a 10.4% increase from the prior-year level of $71.88. The figure was marginally higher than the consensus mark of $79 per barrel.
The average realized natural gas price was $1.40 per thousand cubic feet compared with $1.95 in the year-earlier period. Additionally, the figure was lower than the consensus estimate of $1.47 per thousand cubic feet.
The average realized NGL was $19.53 per thousand cubic feet compared with $16.67 in the year-earlier period. However, the figure was also lower than the consensus estimate of $20.46 per thousand cubic feet.
Costs & Expenses
In the quarter under discussion, the average unit cost rose to $16.26 per barrel of oil equivalent from the previous year's $15.15. This improvement was due to Coterra's depreciation expenses, which increased by 12.2% year over year on a per-barrel basis. Additionally, total operating expenses of $976 million increased from the year-ago quarter’s $909 million.
Financial Position
Cash flow from operations went down 13.6% to $558 million, while CTRA’s cash capital expenditure for drilling and development totaled $479 million. The company’s free cash flow for the quarter amounted to $246 million.
As of Jun 30, 2024, the company had $1.1 billion in cash and cash equivalents. Coterra Energy had a long-term debt (including the current portion) of $2.1 billion as of the same date, indicating a debt-to-capitalization of 16.9%.
Guidance
Coterra has reaffirmed its capital expenditure budget at $1.75 billion to $1.95 billion (non-GAAP) while significantly increasing its oil production estimate to 105.5-108.5 thousand barrels of oil per day (MBopd).
Natural gas production is expected to remain steady, with a narrower range of 2,675-2,775 million cubic feet per day (MMcfpd). These increases are expected to boost total oil and gas equivalent production between 645 MBoepd and 675 MBoepd.
For the third quarter of 2024, the company anticipates producing 620-650 MBoepd, with oil production ranging from 107.0-111.0 MBopd and natural gas production between 2,500 MMcfpd and 2,630 MMcfpd. Capital expenditures for the quarter are estimated at $450-$530 million (non-GAAP).
Based on projected oil and gas prices, the company expects a robust financial performance with $3.2 billion in discretionary cash flow (non-GAAP) and $1.3 billion in free cash flow (non-GAAP) for the year.
Coterra Energy remains dedicated to returning 50% or more of its annual free cash flow (non-GAAP) to the company’s shareholders through a $0.84 per share annual dividend and share repurchases.
CTRA currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and higher than the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For the full year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.