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EQT Corp's (EQT) Q2 Earnings & Sales Beat on Production Rise

Zacks Equity Research

EQT Corporation EQT reported second-quarter 2019 adjusted earnings of 9 cents per share against the Zacks Consensus Estimate of a loss of 4 cents. However, the figure declined from the prior-year level of 13 cents.

Total operating revenues rose to $1,310.3 million from $950.6 million in the prior-year quarter. In addition, the top line beat the Zacks Consensus Estimate of $940 million.

The better-than-expected results were supported by year-over-year increase in production levels, partially offset by lower average price realization and higher cash operating expenses.

EQT Corporation Price, Consensus and EPS Surprise

EQT Corporation Price, Consensus and EPS Surprise

EQT Corporation price-consensus-eps-surprise-chart | EQT Corporation Quote

Production and Price Realization

Sales volume rose to 370.1 billion cubic feet equivalent (Bcfe) of natural gas from the year-ago figure of 362.5 Bcfe. The sales volume was toward the upper limit of the guided range of 355-375 Bcfe. Average realized price of natural gas equivalents was $2.59 per thousand cubic feet, down 7.8% from $2.81 in the year-ago quarter.

Expenses

Total selected cash operating expenses were $1.52 per unit in second-quarter 2019 compared with $1.50 in the prior-year quarter. Processing expenses were 9 cents per thousand cubic feet equivalent (Mcfe) compared with 13 cents in the second quarter of 2018. Gathering expenses rose to 55 cents per Mcfe from 54 cents in the year-ago period. Transmission costs increased to 54 cents per Mcfe from the year-ago level of 52 cents.

Wells Drilled

The company spud 26 net wells in the second quarter. Of the total, 18 wells were drilled in the PA Marcellus with an average length-of-pay of 12,100 feet; and four were drilled in the WV Marcellus and Utica each, with an average length-of-pay of 6,700 feet and 11,400 feet, respectively.

Cash Flows

EQT Corp’s adjusted operating cash flow was $385.7 million during the quarter, down from $529.3 million a year ago.

Capex & Balance Sheet

Total capital expenditure amounted to around $466.4 million in the second quarter, down from $716.3 million in the year-ago period.

As of Jun 30, 2019, the company had around $30 million in cash and $4,968 million of net debt.

Guidance

For third-quarter 2019, the company projects 32 net well drillings. Of the total, 20 wells will be drilled in the PA Marcellus, four wells are likely to be drilled in the WV Marcellus and eight wells will be drilled in Ohio Utica. For full-year 2019, the company expects to drill a total of 112 net wells.

Production sales volume for 2019 has been reiterated in the 1,480-1,520 Bcfe range. Total liquids volume is projected in the band of 12,585-12,985 thousand barrels (MBBl). Of this, third-quarter 2019 total liquids volume is estimated in the range of 3,140-3,340 MBBl. Production sales volume for the third quarter is projected in the 365-385 Bcfe range.

The company projects 2019 gathering costs, and selling, general and administration expenses in the range of 54-56 cents and 11-13 cents per Mcfe, respectively.

Adjusted operating cash flow for 2019 is expected in the range of $1.9-$2 billion. Capital expenditure for the current year is projected at $1.8-1.9 billion.

Zacks Rank and Stocks to Consider

Currently, EQT Corp has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector are given below:

MPLX LP MPLX provides midstream infrastructures to upstream companies. Its bottom line in 2019 is expected to improve 23.6% from a year ago. The company has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cheniere Energy, Inc. LNG is an upstream energy company primarily engaged in liquefied natural gas-related businesses. Its bottom line in 2019 is expected to improve nearly 5% from a year ago. The company has a Zacks Rank #2 (Buy).

Holly Energy Partners, L.P. HEP is a midstream energy firm. Its bottom line in 2019 is expected to improve 8.8% from a year ago. The company has a Zacks Rank #2.

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