It has been about a month since the last earnings report for EQT Corporation (EQT). Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is EQT Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
EQT Corp Misses on Q4 Earnings, Hikes 2023 Sales Outlook
EQT Corporation reported fourth-quarter adjusted earnings from continuing operations of 42 cents per share, missing the Zacks Consensus Estimate by a penny. However, the bottom line improved from the year-ago quarter’s 37 cents.
Adjusted operating revenues declined to $1,317.2 million from $1,410.2 million in the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $1,403 million.
Lower-than-expected quarterly earnings were driven by lower natural gas and liquids sales volumes. The negatives were partially offset by higher average natural gas-equivalent realized price.
Sales volumes declined to 458.6 billion cubic feet equivalent (Bcfe) from the year-ago quarter’s figure of 527 Bcfe. Natural gas sales volume was 435.3 Bcf in the fourth quarter, down from 497 Bcf. Total liquids sales volume was 3,875 thousand barrels (MBbls) versus the year-ago period’s 4,973 MBbls.
Commodity Price Realizations
The average realized price was $2.87 per thousand cubic feet of natural gas equivalent (Mcfe), up from the year-ago quarter’s $2.68 per Mcfe. Natural gas price was $6.63 per Mcf, growing year-over-year from $6.10. The ethane sales price was $13.32 per barrel in the fourth quarter, higher than the year-ago quarter’s $11.93. However, oil prices were $67.82 per barrel, down from $68.50 in fourth-quarter 2021.
Total operating expenses were $1.39 per Mcfe in the fourth quarter of 2022, up from $1.26 in the prior-year quarter.
Processing expenses were 10 cents per Mcfe, flat with the year-ago quarter. Lease operating expenses declined to 7 cents from 8 cents.
EQT Corp’s adjusted operating cash flow was $621.8 million in the quarter, down from $741 million a year ago. Free cash flow in the quarter was $225.5 million, down from $422.2 million.
Capex & Balance Sheet
Total capital expenditure amounted to $398.1 million in the fourth quarter, up from $322.7 million a year ago.
As of Dec 31, 2022, the company had $1,458.6 million in cash and cash equivalents. Net debt was $4,220.3 million.
For 2023, EQT Corp expects total sales volumes of 1,900-2,000 Bcfe, the midpoint of which suggests an increase from $1,940 Bcfe reported in 2022. For the first quarter, total sales volumes are anticipated to be 425-475 Bcfe.
The company expects total per-unit operating costs of $1.31-$1.43 per Mcfe in 2023. Capital expenditure for the year is projected at $1.7-$1.9 billion, suggesting an increase from $1.4 billion reported in 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -35.69% due to these changes.
At this time, EQT Corporation has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise EQT Corporation has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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