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Post Earnings Coverage as Concho Resources Q3 Bottomline Beat Estimates

Upcoming AWS Coverage on Rowan Companies Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 16, 2016 / Active Wall St. announces its post-earnings coverage on Concho Resources, Inc. (NYSE: CXO). The company reported its financial results for the third quarter fiscal 2016 (Q3 FY16) on November 08, 2016. The Midland, Texas-based company's adjusted net income per diluted share fell marginally on y-o-y basis; however it beat Wall Street's estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Concho Resources' competitors within the Oil & Gas Drilling & Exploration space, Rowan Companies PLC (NYSE: RDC), reported on November 01, 2016, its third quarter 2016 results. AWS will be initiating a research report on Rowan Cos in the coming days.

Today, AWS is promoting its earnings coverage on CXO; touching on RDC. Get our free coverage by signing up to:



Earnings Reviewed

During Q3 FY16, Concho Resources total operating revenues came in at $430.55 million, which was lower than $463.47 million recorded at the end of Q3 FY15. Furthermore, total operating revenues for the reported quarter fell short of market expectations of $531 million.

The independent oil and gas company reported net loss of $51.15 million, or $0.38 loss per diluted share, compared to net income of $179.66 million, or $1.49 per diluted share, in Q3 FY15. The company's adjusted net income for Q3 FY16 was $43.43 million, or $0.32 per share, compared to $39.28 million, or $0.33 per share, in the prior year's comparable quarter. Market analysts had forecasted adjusted net income of $0.20 per share for Q3 FY16.

Operating Metrics

Concho Resources total operating costs and expenses during Q3 FY16 increased to $427.97 million from $138.71 million in the past year's comparable quarter. The company's income from operations declined to $2.58 million from $324.76 million in Q3 FY15. Furthermore, earnings before interest, taxes, depreciation, depletion, amortization, and exploration expenses (EBITDAX) for Q3 FY16 came in at $440.13 million, compared to $446.18 million in the year ago period.

In Q3 FY16, Concho Resources' quarterly production volume was 14.07 million barrel of oil equivalent (Boe), or 152.89 thousand barrels of oil equivalent per day (MBoepd), an increase of approximately 6% from Q2 FY16, and also coming in above the high-end of the company's guidance. During the reported period, average daily crude oil production came in at 91.12 thousand barrels compared to 97.23 thousand barrels in Q3 FY16. Furthermore, average daily natural gas production totaled 370.61 million cubic feet (MMcf) in Q3 FY16 versus 312,457 MMcf in the prior year's comparable quarter.

During Q3 FY16, Concho averaged 17 rigs compared to 13 rigs in Q2 FY16. Furthermore, the company started drilling or participating in a total of 72 gross wells (67 operated wells) and completed 46 gross wells during Q3 FY16.

Cash Matters and Balance Sheet

For the quarter ended on September 30, 2016, Concho Resources' net cash provided by operating activities was $437.30 million compared to $760.59 million in the prior year's quarter. The company's cash and cash equivalents balance stood at $1.16 billion, as on September 30, 2016, compared to $228.55 million, at the close of books on December 31, 2015. The company's total long-term debt fell to $2.74 billion as on September 30, 2016, from $3.33 million as on December 31, 2015.

Public Offering

On August 15, 2016, Concho Resources announced an underwritten public offering of nine million shares of its common stock, in which underwriters had an option to purchase up to an additional 1.35 million shares of the company's common stock. On the same date, the company announced the pricing of the public offering at approximately $1.178 billion.


For Q4 FY16, Concho Resources expects total production to average between 164 MBoepd and 167 MBoepd. The company also updated its full-year FY16 production growth target to 5%. It anticipates total capital spend in FY16 to be $1.3 billion, which will be within the company's guidance range of $1.1 billion to $1.3 billion and funded entirely within after-tax cash flow inclusive of settlements from derivatives.

In its guidance for FY17, Concho Resources' Board approved a capital budget of $1.6 billion. The company expects oil volumes to rise by more than 20% y-o-y and forecasts total company production growth of 17% to 20%. Furthermore, it projects approximately 90% of capital to be directed to drilling and completion activities.

Stock Performance

Concho Resources' share price finished yesterday's trading session at $133.59, climbing 4.03%. A total volume of 1.77 million shares exchanged hands, which was higher than the 3 months average volume of 1.53 million shares. The stock has advanced 14.34% and 23.97% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the company have surged 43.86%. The stock currently has a market cap of $19.01 billion.

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SOURCE: Active Wall Street