PDC Energy (PDCE) Moves Up Since Q4 Earnings Beat: Here's Why
The stock of upstream energy operator PDC Energy PDCE has gained 8.7% since its fourth-quarter earnings announcement on Feb 22. The positive response, in addition to an earnings beat, could be attributed to the company’s strong shareholder return performance.
What Did PDC Energy’s Earnings Unveil?
PDC Energy reported adjusted earnings per share of $3.22, beating the Zacks Consensus Estimate of $3.09 and improving from the year-ago period’s profit of $2.86. The outperformance reflects higher oil and natural gas prices, partly offset by lower-than-expected production numbers.
Meanwhile, PDC Energy recorded total revenues of 879.5 million, increasing from the year-ago level of $854.6 million and exceeding the consensus mark by 3.1%.
The company is using the excess cash from a supportive environment to reward investors with dividends and buybacks. As part of that, PDCE’s board of directors declared a quarterly cash dividend of 35 cents per share to its common shareholders. In addition to the regular dividend, PDCE declared a special dividend of 65 cents per share. Moreover, PDC Energy returned $260 million to its shareholders during the fourth quarter through share buybacks.
PDC Energy, Inc. Price, Consensus and EPS Surprise
PDC Energy, Inc. price-consensus-eps-surprise-chart | PDC Energy, Inc. Quote
Production & Prices
For the fourth quarter of 2022, PDC Energy’s production totaled 22,723 thousand barrels of oil equivalent/MBoe (61% liquids), reflecting an increase of 17.1% from 19,405 MBoe a year ago. However, the Colorado-focused company’s quarterly average daily production of 247,000 Boe came in below the Zacks Consensus Estimate of 248,300 Boe due to certain weather-related disruptions. Of the aggregate output, 20,122 MBoe (or some 89%) came from Wattenberg Field and the rest from Delaware Basin.
The average realized natural gas price increased 2.4% from $4.10 per thousand cubic feet (Mcf) in the year-ago quarter to $4.20. PDC Energy sold NGLs at an average price of $22.49 per barrel (Bbls) compared to $32.74 a year ago. Meanwhile, the average oil price realization came in at $82.24 per barrel, 7.5% higher than $76.50 in the year-ago period. Overall, PDC Energy fetched $42.95 per MBoe compared with $32.74 a year ago.
Capital Expenditure & Balance Sheet
The energy explorer shelled out $295.8 million in the form of oil and gas capital investments, while it raked in $257.6 million in adjusted free cash flow. As of year-end 2022, PDC Energy had approximately $6.5 million in cash and cash equivalents, and $1.3 billion in long-term debt, representing a debt-to-capitalization of 24.8%.
2023 Guidance
For 2023, PDC Energy expects to pump 255,000-265,000 Boe per day of hydrocarbon. It also projected average oil production of 82,000-86,000 barrels per day. The company forecast capital spending between $1.35 billion and $1.5 billion.
Zacks Rank & Stock Picks
PDC Energy — an upstream oil and gas company focused on the Wattenberg Field in Colorado and the Delaware Basin in Texas — carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy sector might look at operators like NOW Inc. DNOW, Valero Energy VLO and Sunoco LP SUN, each carrying a Zacks Rank #1 (Strong Buy) currently.
You can see the complete list of today’s Zacks #1 Rank stocks here.
NOW Inc.: DNOW beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. NOW Inc. has a trailing four-quarter earnings surprise of 41.3%, on average.
DNOW is valued at around $1.4 billion. NOW Inc. has seen its shares gain 15.9% in a year.
Valero Energy: Valero Energy is valued at some $51.9 billion. The Zacks Consensus Estimate for VLO’s 2023 earnings has been revised 3.2% upward over the past 30 days.
Valero Energy, headquartered in San Antonio, TX, beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. VLO shares have gained 57.2% in a year.
Sunoco LP: SUN beat the Zacks Consensus Estimate for earnings twice in the trailing four quarters. Sunoco has a trailing four-quarter earnings surprise of 21.6%, on average.
Sunoco is valued at around $4.6 billion. SUN has seen its shares gain 8% in a year.
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