EQT Corporation (EQT) Q2 Earnings & Revenues Beat Estimates
EQT Corporation EQT reported second-quarter adjusted loss from continuing operations of 17 cents per share, beating the Zacks Consensus Estimate of a loss of 27 cents. However, the bottom line declined significantly from the year-ago quarter’s adjusted earnings of 83 cents.
Adjusted operating revenues declined to $993 million from $1,612 million in the prior-year quarter. However, the top line also beat the Zacks Consensus Estimate of $965 million.
Better-than-expected quarterly results were driven by lower operating costs. However, declining realizations of commodity prices partially offset the positives.
EQT Corporation Price, Consensus and EPS Surprise
EQT Corporation price-consensus-eps-surprise-chart | EQT Corporation Quote
Production
Sales volumes declined to 470.8 billion cubic feet equivalent (Bcfe) from the year-ago quarter’s 501.5 Bcfe. The reported figure also missed our estimated sales volume of 496.5 Bcfe. Natural gas sales volume was 449.7 Bcf in the second quarter, down from 476.7 Bcf. It was also lower than our estimate of 473.6 Bcfe. Total liquids sales volume was 3,530 thousand barrels (MBbls) compared with the year-ago period’s 4,132 MBbls and lower than our estimate of 3810 MBbls.
Commodity Price Realizations
The average realized price was $2.11 per thousand cubic feet of natural gas equivalent (Mcfe), down from the year-ago quarter’s $3.21 per Mcfe. The Average natural gas price, including cash-settled derivatives, was $2.03 per Mcf, which decreased year-over-year from $3.01. The natural gas sales price was $2.20 per Mcf in the second quarter, lower than the year-ago quarter’s $7.54. It came lower than our estimate for the same which was pinned at $2.26 per Mcf. Also, oil prices were $49.71 per barrel, down from $91.38.
Expenses
Total operating expenses were $1,053.7 million in the second quarter of 2023, which was lower than $1,165.6 million reported in the prior-year quarter.
Transmission expenses were 33 cents per Mcfe, up from the year-ago quarter of 30 cents. Lease operating expenses declined to 8 cents from 9 cents per Mcfe.
Cash Flows
EQT’s adjusted operating cash flow was $340.8 million in the quarter, down from $916.3 million a year ago. The reported figure came lower than our estimate of $390.9 million. Free cash flow in the quarter was negative $129.3 million, significantly down from $542.6 million.
Capex & Balance Sheet
Total capital expenditure amounted to $473.2 million in the second quarter, up from $376.3 million a year ago.
As of Mar 31, 2023, the company had $1,215.53 million in cash and cash equivalents. Net debt was $3,456.1 million.
Guidance
For 2023, EQT reiterated its guidance of 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 third quarter, total sales volumes are anticipated to be 475-525 Bcfe.
The company expects total per-unit operating costs of $1.30-$1.42 per Mcfe in 2023. Capital expenditure for the third quarter is projected in the range of $400-$450 million and $1.7-$1.9 billion for the year.
Zacks Rank & Stocks to Consider
EQT Corporation currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy space are Evolution Petroleum Corporation EPM, Murphy USA Inc. MUSA and MPLX LP MPLX. While EPM sports a Zacks Rank #1 (Strong Buy), MUSA and MPLX carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Through its ownership interests in onshore oil and natural gas properties in the United States, Evolution Petroleum is touted as a key independent energy player.
Murphy USA serves 1.6 million customers daily and owns a dedicated line space on the Colonial Pipeline. MUSA operates stations close to Walmart supercenters and is a low-cost, high-volume fuel seller. This enables the company to attract significantly more transactions than its peers.
MPLX generates stable fee-based revenues from diverse midstream energy assets via long-term contracts and is least exposed to commodity price fluctuations. The partnership is well positioned to capitalize on the growing demand for fresh midstream assets in order to support increasing volumes of crude oil, natural gas and NGLs in the prolific shale plays in the United States.
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