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Antero Resources (AR) Down 5.5% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Antero Resources (AR). Shares have lost about 5.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Antero Resources 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.

Antero Misses Q2 Earnings Estimates

Antero reported quarterly adjusted earnings per share of 12 cents, missing the Zacks Consensus Estimate of 20 cents. The bottom line, however, turned around from the year-ago loss of 40 cents per share.

Total revenues of $489 million missed the Zacks Consensus Estimate of $1,200 million but improved from the year-ago quarter’s $485 million.

Overall Production

Total production through the June quarter was recorded at 303 billion cubic feet equivalent (Bcfe), which declined 5% from 320 Bcfe a year ago. Natural gas production (accounting for almost 69% of total output) fell 3% year over year to 208 Bcf.

Production of oil for the second quarter was 940 thousand barrels (MBbls), down 6% from 1,004 MBbls in the prior-year period. Its production of 4,356 MBbls of C2 Ethane was 6% lower than 4,622 MBbls in the year-ago quarter. The company’s output of 10,440 MBbls of C3+ NGLs for the quarter was 13% lower than 11,935 MBbls a year ago.

Realized Prices (Excluding Derivatives Settlements)

Weighted natural gas equivalent price realization for the quarter was $3.78 per thousand cubic feet equivalent (Mcfe), higher than the year-earlier figure of $1.83. Realized prices for natural gas rose 76% to $3.01 per Mcf from $1.71 a year ago.

The company’s oil price realization for the quarter was $55.22 per Bbl, up 566% from $8.29 a year ago. Its realized price for C3+ NGLs improved to $40.32 per Bbl from $15.55 in the prior-year quarter. Realized price for C2 Ethane also increased 73% to $9.97 per Bbl from $5.76 a year ago.

Operating Expenses

Total operating expenses for the quarter under review increased to $1,132.3 million from $1,091.8 million in the year-ago period.

Average lease operating costs for the quarter were 7 cents per Mcfe, down 13% year over year. The same for gathering and compression, however, rose 17% year over year to 74 cents per Mcfe.

Transportation expenses rose 19% from the prior-year quarter to 69 cents per Mcfe. Processing costs contracted 9% year over year to 69 cents per Mcfe.

Capex & Financials

For drilling and completion operations, the company spent $167 million through second-quarter 2021. As of Jun 30, 2021, Antero had $4.5 million in cash and cash equivalents. It had an available liquidity of $1.9 billion and a long-term debt of $2.4 billion. It has a debt to capitalization of 29.7%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 96.36% due to these changes.

VGM Scores

Currently, Antero Resources has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Antero Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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