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Hess (HES) Down 2.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Hess (HES - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hess due for a breakout? 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.
Hess Q2 Earnings Beat on Higher Production Volumes
Hess Corporation reported second-quarter 2024 adjusted earnings per share (EPS) of $2.62, which beat the Zacks Consensus Estimate of $2.48. The bottom line improved from the year-ago quarter’s level of 65 cents.
Total quarterly revenues increased to $3,255 million from $2,320 million in the year-ago period. The top line also beat the Zacks Consensus Estimate of $3,221 million.
The strong quarterly results can be attributed to higher oil equivalent production volumes and higher realized prices for oil, natural gas and natural gas liquids (NGL).
Operational Update
Exploration and Production
The Exploration and Production business reported adjusted earnings of $817 million, up from $237 million a year ago. The business benefited from an increase in realized commodity prices.
Quarterly hydrocarbon production totaled 494 thousand barrels of oil equivalent per day (MBoe/d), up from 387 MBoe/d in the year-ago period, primarily due to higher production in Guyana and the Bakken. The reported figure also beat our estimate of 471.5 MBoe/d.
Crude oil production increased from 216 thousand barrels per day (MBbls/d) in the second quarter of 2023 to 308 MBbls/d. The reported figure also beat our estimate of 294.9 MBbls/d.
NGL production totaled 77 MBbls/d, up from 69 MBbls/d in the prior-year quarter. The reported figure beat our estimate of 73.3 MBbls/d.
Natural gas production totaled 653 thousand cubic feet per day (Mcf/d), up from 610 Mcf/d a year ago. The reported figure also beat our estimate of 619.8 Mcf/d.
Worldwide crude oil realization per barrel of $80.29 (excluding the impacts of hedging) increased from $73.74 in the year-ago period. Also, the global natural gas price improved to $4.22 per Mcf from the year-ago figure of $3.82. The average global NGL selling price increased to $20.07 per barrel from $17.95 in the year-ago period.
Midstream
The company generated adjusted net earnings of $66 million, up from $62 million a year ago.
Operating Expenses
Operating expenses for the second quarter totaled $490 million compared with the year-ago level of $454 million. The reported figure was below our estimate of $527.6 million.
Exploration expenses increased to $101 million from $99 million recorded in the year-ago period. Marketing costs increased to $632 million from $547 million a year ago.
Total costs and expenses increased to $2,108 million from $1,955 million in the prior-year period.
Financials
Net cash provided by operating activities amounted to $1,893 million. Hess’ capital expenditure for exploration and production activities totaled $1,151 million.
As of Jun 30, 2024, the company had $2,025 million in cash and cash equivalents. Its long-term debt was $8,548 million at the end of the second quarter.
Outlook
For the third quarter, Hess expects exploration and production net production of 460-470 thousand barrels of oil equivalent per day. The company forecasts a total exploration and production capital and exploratory expenditure of $1,125 million for the said quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Hess has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hess has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Hess (HES) Down 2.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Hess (HES - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hess due for a breakout? 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.
Hess Q2 Earnings Beat on Higher Production Volumes
Hess Corporation reported second-quarter 2024 adjusted earnings per share (EPS) of $2.62, which beat the Zacks Consensus Estimate of $2.48. The bottom line improved from the year-ago quarter’s level of 65 cents.
Total quarterly revenues increased to $3,255 million from $2,320 million in the year-ago period. The top line also beat the Zacks Consensus Estimate of $3,221 million.
The strong quarterly results can be attributed to higher oil equivalent production volumes and higher realized prices for oil, natural gas and natural gas liquids (NGL).
Operational Update
Exploration and Production
The Exploration and Production business reported adjusted earnings of $817 million, up from $237 million a year ago. The business benefited from an increase in realized commodity prices.
Quarterly hydrocarbon production totaled 494 thousand barrels of oil equivalent per day (MBoe/d), up from 387 MBoe/d in the year-ago period, primarily due to higher production in Guyana and the Bakken. The reported figure also beat our estimate of 471.5 MBoe/d.
Crude oil production increased from 216 thousand barrels per day (MBbls/d) in the second quarter of 2023 to 308 MBbls/d. The reported figure also beat our estimate of 294.9 MBbls/d.
NGL production totaled 77 MBbls/d, up from 69 MBbls/d in the prior-year quarter. The reported figure beat our estimate of 73.3 MBbls/d.
Natural gas production totaled 653 thousand cubic feet per day (Mcf/d), up from 610 Mcf/d a year ago. The reported figure also beat our estimate of 619.8 Mcf/d.
Worldwide crude oil realization per barrel of $80.29 (excluding the impacts of hedging) increased from $73.74 in the year-ago period. Also, the global natural gas price improved to $4.22 per Mcf from the year-ago figure of $3.82. The average global NGL selling price increased to $20.07 per barrel from $17.95 in the year-ago period.
Midstream
The company generated adjusted net earnings of $66 million, up from $62 million a year ago.
Operating Expenses
Operating expenses for the second quarter totaled $490 million compared with the year-ago level of $454 million. The reported figure was below our estimate of $527.6 million.
Exploration expenses increased to $101 million from $99 million recorded in the year-ago period. Marketing costs increased to $632 million from $547 million a year ago.
Total costs and expenses increased to $2,108 million from $1,955 million in the prior-year period.
Financials
Net cash provided by operating activities amounted to $1,893 million. Hess’ capital expenditure for exploration and production activities totaled $1,151 million.
As of Jun 30, 2024, the company had $2,025 million in cash and cash equivalents. Its long-term debt was $8,548 million at the end of the second quarter.
Outlook
For the third quarter, Hess expects exploration and production net production of 460-470 thousand barrels of oil equivalent per day. The company forecasts a total exploration and production capital and exploratory expenditure of $1,125 million for the said quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Hess has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hess has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.