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SM Energy Q4 Earnings Beat Estimates, Revenues Miss
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SM Energy Company (SM - Free Report) reported fourth-quarter 2024 adjusted earnings of $1.91 per share, which surpassed the Zacks Consensus Estimate of $1.86. The bottom line increased from the year-ago quarter’s figure of $1.56.
Total quarterly revenues of $852 million increased from $609 million in the year-ago quarter but missed the Zacks Consensus Estimate of $855 million.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The strong quarterly earnings can be attributed to increased oil equivalent production volumes, partially offset by higher hydrocarbon production expenses.
SM Energy Company Price, Consensus and EPS Surprise
SM Energy’s fourth-quarter production totaled 208 thousand barrels of oil equivalent per day (MBoe/d) (almost 51% oil), up nearly 36% from the year-ago level of 153.5 MBoe/d. The Zacks Consensus Estimate for the same was pinned at 212 MBoe/d.
Oil production increased 62% year over year to 106.9 thousand barrels per day (MBbls/d). The figure missed the Zacks Consensus Estimate of 110 MBbls/d.
The company produced 424.8 million cubic feet per day of natural gas in the quarter, up 17% year over year. Natural gas liquids contributed 30.3 MBbls/d to the total production volume. The figure improved 13% on a year-over-year basis.
Realized Prices
Before the effects of derivative settlements, the average realized price per Boe was $43.68 compared with $42.99 in the year-ago quarter. The average realized oil price slipped 10% to $69.34 per barrel.
The average realized price of natural gas declined 11% year over year to $2.19 per thousand cubic feet, while that for natural gas liquids increased 12% to $24.49 per barrel.
Costs & Expenses
On the cost front, unit lease operating expenses increased 1% year over year to $5.35 per Boe. General and administrative expenses decreased 16% to $2.19 per Boe from the prior-year level of $2.60. Transportation expenses jumped 97% to $4.10 per Boe.
Total hydrocarbon production expenses in the quarter were $214.6 million compared with the year-ago level of $137.3 million. Total exploration expenses were $16.3 million, higher than the year-ago figure of $15.8 million.
Capex
Capital expenditures in the December-end quarter totaled $362.3 million, and adjusted free cash flow amounted to $188.9 million.
Balance Sheet
As of Dec. 31, 2024, SM Energy had no cash and cash equivalents and a net debt of $2.8 billion.
Guidance
For the first quarter of 2025, SM Energy expects production to be in the range of 191-198 MBoe/d. Of the total production, oil will likely contribute 52-53%. Capital expenditures (net of the change in capital accruals), excluding acquisitions, are estimated to be in the $425-$435 million range.
For full-year 2025, the company anticipates net production volume to be in the range of 200-215 MBoe/d. Oil is anticipated to account for 51-52% of the total production. At the midpoint, this implies a year-over year increase in production of 22% on a Boe basis and an increase in oil production of 33%. Full-year capital expenditures are expected to be approximately $1.3 billion.
Zacks Rank and Other Key Picks
Currently, SM Energy carries a Zacks Rank #1 (Strong Buy).
Antero Resources, one of the fastest-growing natural gas producers in the United States, boasts a strategic acreage position in the low-risk properties of the Appalachian Basin. The company has more than two decades of premium low-cost drilling inventory in the prolific basin, securing a strong production outlook. AR is well-positioned to capitalize on the increasing demand for LNG, both in the United States and globally.
NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. As demand for LNG continues to grow, NextDecade’s strategic investments in infrastructure and its planned liquefaction capacity provide strong upside potential. With the global LNG market expanding, the company is well-positioned to tap into the increasing export demand from the United States.
Viper Energy is a variable distribution MLP based in Midland, TX. It generates strong and steady royalty income from its royalty acres in the prolific Eagle Ford and Permian Basin, with active rigs providing ample growth potential. The business strategies of the partnership include acquiring mineral interests from third parties and the parent company.
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SM Energy Q4 Earnings Beat Estimates, Revenues Miss
SM Energy Company (SM - Free Report) reported fourth-quarter 2024 adjusted earnings of $1.91 per share, which surpassed the Zacks Consensus Estimate of $1.86. The bottom line increased from the year-ago quarter’s figure of $1.56.
Total quarterly revenues of $852 million increased from $609 million in the year-ago quarter but missed the Zacks Consensus Estimate of $855 million.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The strong quarterly earnings can be attributed to increased oil equivalent production volumes, partially offset by higher hydrocarbon production expenses.
SM Energy Company Price, Consensus and EPS Surprise
SM Energy Company price-consensus-eps-surprise-chart | SM Energy Company Quote
Operational Performance
Production
SM Energy’s fourth-quarter production totaled 208 thousand barrels of oil equivalent per day (MBoe/d) (almost 51% oil), up nearly 36% from the year-ago level of 153.5 MBoe/d. The Zacks Consensus Estimate for the same was pinned at 212 MBoe/d.
Oil production increased 62% year over year to 106.9 thousand barrels per day (MBbls/d). The figure missed the Zacks Consensus Estimate of 110 MBbls/d.
The company produced 424.8 million cubic feet per day of natural gas in the quarter, up 17% year over year. Natural gas liquids contributed 30.3 MBbls/d to the total production volume. The figure improved 13% on a year-over-year basis.
Realized Prices
Before the effects of derivative settlements, the average realized price per Boe was $43.68 compared with $42.99 in the year-ago quarter. The average realized oil price slipped 10% to $69.34 per barrel.
The average realized price of natural gas declined 11% year over year to $2.19 per thousand cubic feet, while that for natural gas liquids increased 12% to $24.49 per barrel.
Costs & Expenses
On the cost front, unit lease operating expenses increased 1% year over year to $5.35 per Boe. General and administrative expenses decreased 16% to $2.19 per Boe from the prior-year level of $2.60. Transportation expenses jumped 97% to $4.10 per Boe.
Total hydrocarbon production expenses in the quarter were $214.6 million compared with the year-ago level of $137.3 million. Total exploration expenses were $16.3 million, higher than the year-ago figure of $15.8 million.
Capex
Capital expenditures in the December-end quarter totaled $362.3 million, and adjusted free cash flow amounted to $188.9 million.
Balance Sheet
As of Dec. 31, 2024, SM Energy had no cash and cash equivalents and a net debt of $2.8 billion.
Guidance
For the first quarter of 2025, SM Energy expects production to be in the range of 191-198 MBoe/d. Of the total production, oil will likely contribute 52-53%. Capital expenditures (net of the change in capital accruals), excluding acquisitions, are estimated to be in the $425-$435 million range.
For full-year 2025, the company anticipates net production volume to be in the range of 200-215 MBoe/d. Oil is anticipated to account for 51-52% of the total production. At the midpoint, this implies a year-over year increase in production of 22% on a Boe basis and an increase in oil production of 33%. Full-year capital expenditures are expected to be approximately $1.3 billion.
Zacks Rank and Other Key Picks
Currently, SM Energy carries a Zacks Rank #1 (Strong Buy).
Investors interested in the energy sector may look at some other top-ranked stocks like Antero Resources Corporation (AR - Free Report) , NextDecade Corporation (NEXT - Free Report) and Viper Energy, Inc. (VNOM - Free Report) . While Antero Resources and NextDecade presently sport a Zacks Rank #1 each, Viper Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Antero Resources, one of the fastest-growing natural gas producers in the United States, boasts a strategic acreage position in the low-risk properties of the Appalachian Basin. The company has more than two decades of premium low-cost drilling inventory in the prolific basin, securing a strong production outlook. AR is well-positioned to capitalize on the increasing demand for LNG, both in the United States and globally.
NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. As demand for LNG continues to grow, NextDecade’s strategic investments in infrastructure and its planned liquefaction capacity provide strong upside potential. With the global LNG market expanding, the company is well-positioned to tap into the increasing export demand from the United States.
Viper Energy is a variable distribution MLP based in Midland, TX. It generates strong and steady royalty income from its royalty acres in the prolific Eagle Ford and Permian Basin, with active rigs providing ample growth potential. The business strategies of the partnership include acquiring mineral interests from third parties and the parent company.