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Gulfport Energy (GPOR) Down 19.9% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research

A month has gone by since the last earnings report for Gulfport Energy (GPOR). Shares have lost about 19.9% in that time frame, underperforming the S&P 500.

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

Gulfport Q1 Earnings and Revenues Beat Estimates

Gulfport Energy Corporation witnessed better-than-expected results in first-quarter 2020 as both earnings and sales surpassed estimates.

This Oklahoma-based company reported first-quarter adjusted net earnings per share (EPS) of 10 cents, beating the Zacks Consensus Estimate of a loss of 12 cents attributable to lower lease operating and depreciation expenses. However, the bottom line was below the year-ago EPS of 33 cents a share amid weaker year-over-year natural gas price realizations and lower production volumes.

Further, revenues of $246.88 million came ahead of the Zacks Consensus Estimate by 12.02%. However, the top line plunged from the year-ago figure of $320.58 million.

Production & Realized Prices

Gulfport’s total oil and gas production decreased to 95,896 million cubic feet equivalent (MMcfe) from 113,726MMcfe in the corresponding period of last year. Of the total output, 89.7% comprised natural gas. Gas production from the Utica Shale declined 17.7% year over year to 73,575MMcfe. Nearly 76.7% of the output came from the Utica acreage. Output from SCOOP came in at 22,274MMcfe, lower than the year-ago level of $23,394MMcfe.

Average realized natural gas price (before the impact of derivatives) during the first quarter was $1.26 per thousand cubic feet, lower than the year-ago period’s $2.70. Average realized natural gas liquids price was 36 cents per gallon, down from the year-ago quarter’s 58 cents. Gulfport fetched $43.53 per barrel of oil during the quarter, down from the year-ago figure of $53.10. Overall, the company realized $1.55 per thousand cubic feet equivalent in the quarter compared with $3 a year ago.

Costs, Capex and Balance Sheet

Total expenses in the quarter under review amounted to $727 million, higher than $227.6 million in the prior-year period. This rise is mainly attributed to higher general and administrative costs and impairment charges incurred in the reported quarter. Depreciation costs plunged34.1% from the prior-year quarter to $78 million.

In the reported quarter, Gulfport spent $135.3 million on capital expenditure. As of Mar 31, this natural gas-weighted energy explorer had $1.63 million in cash and cash equivalents. Gulfport had a long-term debt of $1,898 million, representing a total debt to total capitalization of 70.77%.

2020 Guidance

As a result of coronavirus induced economic downturn,this upstream player expects current-year capex at the lower end or below the of $285-$310 million band. Gulfport plans to close up a minimal amount production over the next few months, together with a large number of vertical wells in the SCOOP. The Company expects these shut ins to affect its production by not more than 20 MMcfe per day.  Gulfport also expects some of its non-operated production to be negatively influenced by voluntary shut-ins owing to lower prices. The company expects natural gas price realizations (before the effects of hedges and including transportation) between 70 cents and 80 cents per thousand cubic feet in 2020.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 65.81% due to these changes.

VGM Scores

At this time, Gulfport Energy has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% 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. It comes with little surprise Gulfport Energy has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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