A month has gone by since the last earnings report for WPX Energy, Inc. . Shares have lost about 9.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it 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.
WPX Energy Loss Narrower than Expected, Sales Lag
Independent oil & gas operator, WPX Energy Inc. reported a loss of $0.16 per share in the fourth quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of $0.17.
Full-year adjusted loss was $0.82 compared with the Zacks Consensus Estimate of a loss of $0.83.
Total Revenue
WPX Energy’s quarterly revenues of $231 million missed the Zacks Consensus Estimate of $298 million by 22.5%. Total revenue increased 38.3% from $167 million in the year-ago quarter. The year-over-year increase in total revenue was due to higher realized average prices and production volumes.
Total Revenue in 2016 was $693 million down 49.3% from the year-ago level and 29.7% lower than the Zacks Consensus Estimate.
Highlights of the Release
Total production in the fourth quarter was 88,700 barrels per oil equivalent (boe) per day, up 9% year over year. Total liquids accounted for 62% of the total production, reflecting the company’s increasing focus on oil.
Oil production was 44,700 barrels per day which was nearly 15.8% higher than the year-ago quarter level of 38,600 barrels per day.
Total expenses were $309 million, down 0.9% from $312 million in the year-ago quarter.
Interest expenses in the reported quarter were $48 million, down 15.8% from $57 million in the year-ago quarter.
Realized Prices & Hedges
Realized oil prices in the quarter were $42.18 per barrel, up 20.0% from the year-ago quarter.
Realized natural gas prices were $2.13 per thousand cubic feet (Mcf), down 17.7%. Realized prices for natural gas liquids were up 90.1% to $18.54 per barrel.
For 2017, the company has 39,554 barrels per day of oil hedged at a weighted average price of $50.93 per barrel. Further, WPX Energy has 170,000 million British thermal unit (MMBtu) per day of natural gas hedged at a weighted average price of $3.02 per MMBtu.
For 2018, WPX Energy has 30,000 barrels per day of oil hedged at a weighted average price of $54.61 per barrel. The company also has 155,000 MMBtu per day of natural gas hedged at a weighted average price of $2.98 per MMBtu.
Financial Update
WPX Energy had $496 million of cash and cash equivalents as of Dec 31, 2016, compared with $38 million at the end of 2015.
Long-term debt as of Dec 31, 2016 was $2,575 million, down from $3,189 million as of Dec 31, 2015.
Net cash from operating activities in 2016 was $206 million, compared with $811 million in the same period a year ago. Capital expenditure in 2016 was $578 million, compared with $1,124 million in the year-ago period.
Guidance
For 2017, WPX Energy has a capital budget of $870–$940 million. More than half of the capital is targeted for development in the Delaware Basin.
The company expects total production in 2017 of 103–113 thousand barrels of oil equivalents per day (MBoe/d), including 52–56 thousand barrels per day (Mbbl/d) of oil. Projected 2017 oil volumes represent 30% growth from 2016 levels.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower. In the past month, the consensus estimate has shifted by 7.5% due to these changes.
VGM Scores
At this time, WPX Energy's stock has an average Growth Score of 'C', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is WPX Energy (WPX) Down 9.7% Since the Last Earnings Report?
A month has gone by since the last earnings report for WPX Energy, Inc. . Shares have lost about 9.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it 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.
WPX Energy Loss Narrower than Expected, Sales Lag
Independent oil & gas operator, WPX Energy Inc. reported a loss of $0.16 per share in the fourth quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of $0.17.
Full-year adjusted loss was $0.82 compared with the Zacks Consensus Estimate of a loss of $0.83.
Total Revenue
WPX Energy’s quarterly revenues of $231 million missed the Zacks Consensus Estimate of $298 million by 22.5%. Total revenue increased 38.3% from $167 million in the year-ago quarter. The year-over-year increase in total revenue was due to higher realized average prices and production volumes.
Total Revenue in 2016 was $693 million down 49.3% from the year-ago level and 29.7% lower than the Zacks Consensus Estimate.
Highlights of the Release
Total production in the fourth quarter was 88,700 barrels per oil equivalent (boe) per day, up 9% year over year. Total liquids accounted for 62% of the total production, reflecting the company’s increasing focus on oil.
Oil production was 44,700 barrels per day which was nearly 15.8% higher than the year-ago quarter level of 38,600 barrels per day.
Total expenses were $309 million, down 0.9% from $312 million in the year-ago quarter.
Interest expenses in the reported quarter were $48 million, down 15.8% from $57 million in the year-ago quarter.
Realized Prices & Hedges
Realized oil prices in the quarter were $42.18 per barrel, up 20.0% from the year-ago quarter.
Realized natural gas prices were $2.13 per thousand cubic feet (Mcf), down 17.7%. Realized prices for natural gas liquids were up 90.1% to $18.54 per barrel.
For 2017, the company has 39,554 barrels per day of oil hedged at a weighted average price of $50.93 per barrel. Further, WPX Energy has 170,000 million British thermal unit (MMBtu) per day of natural gas hedged at a weighted average price of $3.02 per MMBtu.
For 2018, WPX Energy has 30,000 barrels per day of oil hedged at a weighted average price of $54.61 per barrel. The company also has 155,000 MMBtu per day of natural gas hedged at a weighted average price of $2.98 per MMBtu.
Financial Update
WPX Energy had $496 million of cash and cash equivalents as of Dec 31, 2016, compared with $38 million at the end of 2015.
Long-term debt as of Dec 31, 2016 was $2,575 million, down from $3,189 million as of Dec 31, 2015.
Net cash from operating activities in 2016 was $206 million, compared with $811 million in the same period a year ago. Capital expenditure in 2016 was $578 million, compared with $1,124 million in the year-ago period.
Guidance
For 2017, WPX Energy has a capital budget of $870–$940 million. More than half of the capital is targeted for development in the Delaware Basin.
The company expects total production in 2017 of 103–113 thousand barrels of oil equivalents per day (MBoe/d), including 52–56 thousand barrels per day (Mbbl/d) of oil. Projected 2017 oil volumes represent 30% growth from 2016 levels.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower. In the past month, the consensus estimate has shifted by 7.5% due to these changes.
WPX Energy, Inc. Price and Consensus
WPX Energy, Inc. Price and Consensus | WPX Energy, Inc. Quote
VGM Scores
At this time, WPX Energy's stock has an average Growth Score of 'C', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.