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Pioneer Natural Resources Co. Message Board

  • tyroneyeah tyroneyeah Dec 30, 2013 1:46 AM Flag

    PXD Earnings Preannouncement is OVERDUE. They said "a few weeks" after Nov 27th...

    I wonder why it's taking this long to issue their earnings PRE-ANNOUNCEMENT to account for substantial freeze-related losses. I wouldn't want to be long when they disclose the EPS impact of the frozen wells that occurred before Thanksgiving.

    On November 27th, their press release stated:

    1) They would "Update 4th Quarter Guidance" - once the full impact of anticipated weather-related downtime and associated repairs in the areas that were affected can be determined. -AND-

    2) "An extensive recovery period is expected, and it is likely to be A FEW WEEKS before the full impact of this event can be determined."

    Well, it has now been at least A FEW WEEKS, so their guidance update (aka "Preannouncement/Warning") should be happening about now. I expect a 5-8% hit to the stock on that day as I think it'll be worse than the 10% miss that one analyst mentioned.

    From their Nov 27th Press Release:
    --
    Pioneer Natural Resources Company (PXD) (“Pioneer” or “the Company”) today announced that severe winter weather in Texas has significantly impacted the Company’s production and drilling operations in the Spraberry/Wolfcamp, Eagle Ford Shale and Barnett Shale Combo plays. The Spraberry/Wolfcamp area has been especially hard hit as heavy icing and low temperatures have resulted in extensive power outages, facilities freeze-ups, trucking curtailments and limited access to production and drilling facilities. An extensive recovery period is expected, and it is likely to be a few weeks before the full impact of this event can be determined.

    This unforeseen severe weather event was not accounted for in Pioneer’s production and financial guidance for the fourth quarter of 2013, which was provided in the Company’s earnings release on November 4, 2013. Pioneer expects to update its fourth quarter guidance once the full impact of anticipated weather-related downtime and associated repairs in the areas that were affected can be determined.

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    • Looks like PXD will preannounce after the books close on the quarter, not before quarter end.

      That means as soon as Jan 2 or Jan 3rd.

      I'm guessing the following:

      1) The freeze probably knocked out a substantial amount of the key operations (Revenue) in the Permian representing up to 1-2 weeks of production.

      2) Suppose the revenue loss was equivalent to 1 week out of the 12-week quarter...

      3) Last quarter's Oil & Gas revenues were $908M.

      4) 1/12 of $908M would represent $75.6M of lost revenues due to freeze loss

      5) Last quarter's Net income attributable to common stockholders was $91.1M

      6) So if we subtract the "Revenues due to Freeze Loss" from Net Income last quarter: $91.1M - $75.6M = $15.5M Net income in this quarter.

      7) $15.5M Net income represents an EPS of only about $0.21/share!! This compares to Current Analyst Consensus Estimate of $1.18/share

      *NOTE: This back-of-the-envelope calculation does NOT even include Capital Asset Losses due to the freeze and labor and materials cost to repair them!! So in addition to lost revenues, there will be higher EXPENSES.

      If the aforementioned freeze-related EXPENSES are subtracted, it looks like PXD might even be looking at a BREAKEVEN or loss for the quarter.

      **NOTE: Current Analyst Consensus Estimate of $1.18/share has come down from $1.26/share in the past 30 days since the Nov 27th Freeze Announcement. Clearly, estimates will need to come down a lot more after the preannouncement.

      My sense is that when PXD does preannounce an earnings miss this week or next, these numbers will surprise many PXD investors.

      • 2 Replies to tyroneyeah
      • Not to mention after January 1st, there is likely to be a significant amount of PROFIT-TAKING by investors who are sitting on 100%, 200% gains from the past 2 years, but wanted to postpone taking profit in 2013 to postpone paying Capital Gains Taxes until 2015.

        I see DELAYED 2013 profit-taking as a formidable downdraft on PXD shares in the coming week.

        In 2011-2012, PXD share prices averaged about $90/share. It's up more than 100% for those investors.

        And for investors who bought into the $58.58 low in Oct 2011, they have TRIPLED their investment. Many of those people probably haven't wanted to take profits (and pay huge capital gains) in 2013, but will be doing so.

      • beenquietlywatchingandtakingnote beenquietlywatchingandtakingnote Dec 31, 2013 4:04 PM Flag

        been watching these boards for a while now and I have to be honest...I've never seen anyone post such garbage as you trying to get people to get scared all in hopes that your short position won't barbeque you...good luck with that...you will get barbequed

 
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