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Pioneer Natural (PXD) Q1 Earnings Beat on Permian Operations

Zacks Equity Research
Viper Energy Partners (VNOM) has witnessed downward earnings estimate revisions in the past 60 days, suggesting that it could be a risky choice for investors at the moment.

Pioneer Natural Resources Company PXD reported first-quarter 2019 earnings of $1.83 per share, excluding one-time items, beating the Zacks Consensus Estimate of $1.61 and improving from the year-ago quarter’s $1.66.

Revenues and other income rose 12.2% year over year to $2,413 million from $2,150 million a year ago. The top line exceeded the consensus mark of $2,168 million.

The strong quarterly results were attributed to ramped-up Permian operations.

Production

Total production in the reported quarter averaged 333.4 thousand barrels of oil equivalent per day (MBOE/d), up 7% year over year. The upside can be attributed to higher activities in the Permian Basin.

Oil production averaged 206.3 thousand barrels per day (MBbl/d), up 13% year over year. Natural gas liquids (NGLs) production was marginally higher than the year-ago quarter figure. However, natural gas production amounted to 360.6 million cubic feet per day (MMcf/d) but was down from the year-ago quarter’s 378.9 MMcf/d.

Price Realization

On an oil equivalent basis, average realized price was $37.84 per barrel in the reported quarter compared with $45.11 a year ago. The company reported average realized crude price at $49.38 a barrel, down from $61.64 in the March quarter of 2018.    

Average natural gas price dropped 3.5% year over year to $2.50 per thousand cubic feet (Mcf). Natural gas liquids were sold at $22.79 a barrel, down from $27.74 a year ago.  

Cash, Debt and Capex

At the end of the quarter under review, cash balance totaled $511 million. Long-term debt summed $1,836 million, reflecting a debt-to-capitalization ratio of 15.8%.    

Guidance

Pioneer Natural continues to project production in the Permian Basin at the range of 320-335 MBOE/D for 2019. This suggests a year-over-year increase of 12% to 17%.

For the second quarter, the company projects production from the prolific play at the band of 313-328 MBOE/D.

Through 2019, the upstream energy player intends to invest capital in the range of $3.1 billion to $3.4 billion.

In February 2019, the explorer and producer hiked its semi-annual cash dividend. Further, the company intends to raise dividends to reward stock holders with an annual yield of roughly 1% per share.

Zacks Rank and Key Picks

Pioneer Natural currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space are Anadarko Petroleum Corporation APC, ProPetro Holding Corp. PUMP and TransCanada Corp. TRP. Anadarko sports a Zacks Rank #1 (Strong Buy), while ProPetro and TransCanada hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.     

Anadarko Petroleum posted an average positive earnings surprise of 6.6% for the past four quarters.

The Zacks Consensus Estimate for Midland, TX-based ProPetro’s 2019 earnings is pegged at $2.42, indicating 21% growth over the year-ago reported figure. Next year’s forecast is $2.70, hinting at 11.5% growth.

TransCanada has beaten estimates in the last four quarters, the average being 19%.

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