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Range Resources (RRC) Beats Q1 Earnings & Revenue Estimates

Zacks Equity Research

Range Resources Corporation RRC delivered first-quarter 2019 adjusted earnings of 36 cents per share that surpassed the Zacks Consensus Estimate of 24 cents. The company generated earnings of 46 cents in the year-ago quarter.
 

Range Resources Corporation Price, Consensus and EPS Surprise

 

Range Resources Corporation Price, Consensus and EPS Surprise | Range Resources Corporation Quote

 

In the quarter under review, total revenues amounted to $748.1 million, which surpassed the Zacks Consensus Estimate of $726 million. The top line improved nearly 1% from $742.6 million in the prior-year quarter.

The quarterly results were driven by higher production and increased natural gas liquids (NGLs) price realizations, partially offset by higher expenses.

Operational Performance

During the first quarter, the company’s production averaged almost 2,255.9 million cubic feet equivalent per day (MMcfe/d), up from 2,188.4 MMcfe/d in the prior-year quarter. Natural gas contributed 69% to total production, while NGL and oil accounted for the remaining 31%.

Oil production plunged 24% on a year-over-year basis.NGL and natural gas production increased 4% each year over year, respectively.

Production in Appalachian totaled 2,027 MMcfe/d, up 12% from the year-ago quarter’s figure.

The company’s total price realization (including the effects of hedges and derivative settlements) averaged $1.94 per thousand cubic feet equivalent (Mcfe), down 17% year over year. NGL prices totaled $11.35 per barrel, up 5% year over year.

Natural gas prices declined 23% on a year-over-year basis and amounted to $1.74 per Mcf. Crude oil prices totaled $49.61 per barrel, down 3% on a year-over-year basis.

Expenses

Total expenses were $741.0 million, up 14% year over year.

Financials

At the end of the quarter, the company had long-term debt of approximately $3,790.6 million with a debt-to-capitalization ratio of 48.3%. The company incurred expenditures worth $210 million in the first quarter.     

Guidance

For the second quarter of 2019, the company estimates production in the range of 2,270-2,280 MMcfe/d. For 2019, production is projected in the range of 2,325-2,345 MMcfe/d. Consequently, annual output is expected to rise 5.6-6.5%.

The upstream energy player projects 2019 capital budget at $756 million, which suggests a decline from $910 million in 2018.

Zacks Rank & Key Picks

Currently, Range Resources carries a Zacks Rank #3 (Hold).

Some better-ranked players in the energy space are Antero Resources Corporation AR, CrossAmerica Partners L.P. CAPL and SEACOR Holdings, Inc CKH. While Antero Resources and CrossAmerica Partners sport a Zacks Rank #1 (Strong Buy), SEACOR Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Antero Resources is an independent explorer, primarily engaged in the acquisition and development of natural gas, natural gas liquids as well as oil resources in the Appalachian Basin. The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters.

CrossAmerica Partners is involved in the wholesale distribution of motor fuels, comprising gasoline and diesel fuel. The partnership delivered average positive earnings surprise of 452.2% in the last four quarters.

SEACOR Holdings is a diversified holding company, mainly focused on domestic and international transportation, logistics as well as risk management consultancy. The bottom line for 2019 is expected to inch up 1.7% year over year. The company delivered average positive earnings surprise of 20.5% in the trailing four quarters.

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