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Broadridge Financial Solutions, Inc. Message Board

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  • dontdropyourlunch dontdropyourlunch Jul 21, 2000 2:02 AM Flag

    BR Earnings Reflection!

    first i thought the insider sales were pretty
    tame back when the stock was 41 and 44 so i did not
    have problems with that. it was public
    anyway.

    i do have a PROBLEM with the reported average price
    for the natural gas for the quarter. the earnings
    press release states the average price for the 2Q00 ng
    was $2.44. ok let's do some simple math based on br's
    own public documents and the price open market ng in
    2Q00. br's annual report states exactly the amount of
    ng hedged in 2000 at a price of $2.43. we know from
    many statements from company people that about 900 mcf
    per day of br's ng production was hedged, which is a
    little less than 50% (i think the daily production rate
    was 1,900 mcf (someone correct me if wrong) of the
    daily production on ng. to sort of support this a
    presentation on br's website to banc of america analysts
    meeting on june 22, 2000, states that the hedge number is
    886 mcf at $2.53/mcf (i think that is right, but i am
    doing this from memory).

    we know the price
    during 2Q00 was between $3 and $4+, so how could half
    the ng production plus the hedged ng production
    average price be only $2.44 average? i was very surprised
    no analyst asked about the average price of ng. if
    we are being told the true story on hedges, then
    something seems wrong with the $2.44 ng price. can anybody
    figure this out or does anyone already know the
    answer?

    also the conf. call was weak. i cannot believe that we
    just heard about a 7% production curtailment during
    2Q00 due to unscheduled downtime (read problems). hey
    management, the reason so many analysts asked you on the
    conf. call about "anymore surprises" is due to the
    surprises you dumped out today. br management must learn to
    be more transparent during the quarter. the next to
    last statement and question was good. the analyst told
    them what was not going right and asked whether bobby
    was planning to sell the company. i hope the company
    is in play. last year i heard that texaco was
    interested. br has a lot of ng that they don't seem to be
    able to get out at today's prices.

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    • consider the difference between the Merc gas
      location and BR's production locations. This basis may
      explain part of the difference - also is Canada gas the
      same price as US gas? Also do they not have gas in the
      North Sea that may be priced differently. I do not
      understand when they quote $/mcf and if that is the same as
      $/mmbtu? Seems like they are the same only if BR's gas is
      exactly 1 mmbtu per mcf.

      • 1 Reply to ABQ747
      • I recall seeing previously that the n. sea prices
        are under $2. I dont recall offhand what % of BR's
        production is N american vs overseas.

        The "sky is
        falling" reaction to this earnings report is a good
        indication that there was a healthy degree of speculative
        money in BR as of late. I dont think the stock will be
        moving much higher anytime soon, but long term I still
        believe this is significantly undervalued.

 
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