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Concho (CXO) Reports In Line Q1 Earnings, Slashes Capex
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Concho Resources Inc. reported first-quarter net income per share (excluding special items) of 72 cents, in line with the Zacks Consensus Estimate and the prior-year period earnings. The company’s bottom line was favorably impacted by better-than-anticipated production volumes, partly offset by lower commodity prices.
Precisely, the upstream player’s output of 326 thousand barrels of oil equivalent per day (MBoe/d) surpassed the Zacks Consensus Estimate of 323.8 MBoe/d.
The Permian-focused player generated revenues of $922 million, missing the consensus mark and the year-ago level by 16.5%.
The company’s adjusted EBITDA increased by 3.8% from the year-ago quarter to $784 million, while cash flow from operating activities improved to $836 million from $623 million.
Concho Resources Inc. Price, Consensus and EPS Surprise
Concho's average quarterly volume remained essentially unchanged year over year at 326 MBoe/d (64% oil). Total output exceeded the high end of the firm’s forecast of 316-325 MBoe/d.
Daily oil output was flat at 209 thousand barrels but went past the high end of the company's guidance, while natural gas production edged down 1.4% year over year to 699 million cubic feet (MMcf).
Realized Prices (Excluding Derivatives Effect)
The average realized natural gas price decreased from $2.64 per Mcf in the year-ago quarter to 79 cents. Meanwhile, average oil price realization came in at $45.85 per barrel, lower than $49.39 in the year-ago period. Overall, the company fetched $31.13 per Boe compared with $37.33 a year ago.
Operating Performance
The company reported an operating loss of $10.6 billion after incurring a $12.6-billion impairment charge. Operating expenses in the quarter amounted to $11.5 billion. A year ago, Concho recorded an operating loss of $846 million. However, as part of its efforts to improve costs and margins, the Midland, TX-based oil and gas producer succeeded in cutting its controllable expenses 11% year over year to $8.68 per Boe.
Balance Sheet
As of Mar 31, Concho had long-term debt of $4 billion, representing a debt-to-capitalization ratio of 32.1%.
Guidance
Concho Resources has decided to withhold detailed quarterly and annual guidance, citing the slump in commodity prices and market uncertainties related to the coronavirus pandemic. The Zacks Rank #3 (Hold) company expects 2020 overall volumes to remain flat year over year as it looks to complete 110 to 130 gross wells for the remainder of this year while working with an average of eight rigs. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Further, Concho Resources has cut capital expenditure budget for 2020 by 40% to $1.6 billion from its original guidance of $2.7 billion due to current market conditions. Most shale operators, including the likes of Diamondback Energy (FANG - Free Report) , Parsley Energy, Marathon Oil (MRO - Free Report) , have lowered their 2020 capital expenditure target to contend with depleted oil prices. Some like Occidental (OXY - Free Report) have been forced to slash their dividend payouts.
Concho is also targeting $100 million in operating and general and administrative cost reductions. The company’s controllable cash costs are expected to clock in below $9 per Boe, down from $9.44 in 2019.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Concho (CXO) Reports In Line Q1 Earnings, Slashes Capex
Concho Resources Inc. reported first-quarter net income per share (excluding special items) of 72 cents, in line with the Zacks Consensus Estimate and the prior-year period earnings. The company’s bottom line was favorably impacted by better-than-anticipated production volumes, partly offset by lower commodity prices.
Precisely, the upstream player’s output of 326 thousand barrels of oil equivalent per day (MBoe/d) surpassed the Zacks Consensus Estimate of 323.8 MBoe/d.
The Permian-focused player generated revenues of $922 million, missing the consensus mark and the year-ago level by 16.5%.
The company’s adjusted EBITDA increased by 3.8% from the year-ago quarter to $784 million, while cash flow from operating activities improved to $836 million from $623 million.
Concho Resources Inc. Price, Consensus and EPS Surprise
Concho Resources Inc. price-consensus-eps-surprise-chart | Concho Resources Inc. Quote
Volume Analysis
Concho's average quarterly volume remained essentially unchanged year over year at 326 MBoe/d (64% oil). Total output exceeded the high end of the firm’s forecast of 316-325 MBoe/d.
Daily oil output was flat at 209 thousand barrels but went past the high end of the company's guidance, while natural gas production edged down 1.4% year over year to 699 million cubic feet (MMcf).
Realized Prices (Excluding Derivatives Effect)
The average realized natural gas price decreased from $2.64 per Mcf in the year-ago quarter to 79 cents. Meanwhile, average oil price realization came in at $45.85 per barrel, lower than $49.39 in the year-ago period. Overall, the company fetched $31.13 per Boe compared with $37.33 a year ago.
Operating Performance
The company reported an operating loss of $10.6 billion after incurring a $12.6-billion impairment charge. Operating expenses in the quarter amounted to $11.5 billion. A year ago, Concho recorded an operating loss of $846 million. However, as part of its efforts to improve costs and margins, the Midland, TX-based oil and gas producer succeeded in cutting its controllable expenses 11% year over year to $8.68 per Boe.
Balance Sheet
As of Mar 31, Concho had long-term debt of $4 billion, representing a debt-to-capitalization ratio of 32.1%.
Guidance
Concho Resources has decided to withhold detailed quarterly and annual guidance, citing the slump in commodity prices and market uncertainties related to the coronavirus pandemic. The Zacks Rank #3 (Hold) company expects 2020 overall volumes to remain flat year over year as it looks to complete 110 to 130 gross wells for the remainder of this year while working with an average of eight rigs. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Further, Concho Resources has cut capital expenditure budget for 2020 by 40% to $1.6 billion from its original guidance of $2.7 billion due to current market conditions. Most shale operators, including the likes of Diamondback Energy (FANG - Free Report) , Parsley Energy, Marathon Oil (MRO - Free Report) , have lowered their 2020 capital expenditure target to contend with depleted oil prices. Some like Occidental (OXY - Free Report) have been forced to slash their dividend payouts.
Concho is also targeting $100 million in operating and general and administrative cost reductions. The company’s controllable cash costs are expected to clock in below $9 per Boe, down from $9.44 in 2019.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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