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Range Resources (RRC) Q2 Earnings Top Estimates, Revenues Lag

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Range Resources Corporation RRC posted second-quarter 2020 adjusted loss of 10 cents per share, narrower than the Zacks Consensus Estimate of a loss of 17 cents. In the year-ago quarter, the company reported profit of 2 cents per share.  

In the second quarter, total revenues amounted to $377 million, missing the Zacks Consensus Estimate of $457 million. Moreover, the top line deteriorated from the prior-year quarter’s $851 million.

Range Resources Corporation Price, Consensus and EPS Surprise

 

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

Range Resources Corporation price-consensus-eps-surprise-chart | Range Resources Corporation Quote

The narrower-than-expected loss was supported by higher natural gas equivalent production volumes and decreased direct operating expenses. This was partially offset by lower price realizations of commodities.

Operational Performance

During the second quarter, the company’s production averaged 2,348.9 million cubic feet equivalent per day (MMcfe/d), up 3% from the prior-year period. Natural gas contributed 70.7% to total production, while natural gas liquids (NGLs) and oil accounted for the remaining.

Oil and NGL production fell 27% and 1%, respectively, on a year-over-year basis. However, natural gas production increased 6% from the prior-year quarter.

Its total price realization (including derivative settlements and after third-party transportation costs) averaged 89 cents per thousand cubic feet equivalent (Mcfe), down 38% year over year.

Natural gas price declined 27% on a year-over-year basis to 91 cents per Mcf and NGL prices dropped 69%, while oil prices fell 14%.

Expenses Decline

Total exploration cost declined marginally 0.9% year over year to $7.7 million. Moreover, on a unit basis, transportation, gathering, processing and compression expenses were recorded at $1.30 per Mcfe, lower than $1.45 in the prior-year quarter. Also, direct operating costs contracted to 11 cents per Mcfe from the year-ago figure of 16 cents.

Share Repurchase & Capital Expenditure

In the second quarter, the company bought back 200,000 shares at an average price of $2.22.

The company’s drilling and completion expenditures totaled $99 million in the reported quarter. At the end of the second quarter, it had total debt of $3,165.1 million, with a debt-to-capitalization of 57.5%.

Guidance

For 2020, Range Resources expects production volumes of 2.3 billion cubic feet equivalent per day (Bcfe/D), which indicates no change from 2019 production volume. The company expects 2020 capital expenditure to be $430 million or lower, suggesting a decline from $728 million in 2019.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Concho Resources Inc. CXO, Noble Energy Inc. NBL and EOG Resources, Inc. EOG, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Concho is likely to see earnings growth of 21.6% in 2020.

Noble Energy has witnessed upward estimate revisions for its 2020 bottom line in the past 30 days. 

EOG Resources’ 2020 bottom-line estimates have risen more than 200% over the past 30 days.

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Noble Energy Inc. (NBL) : Free Stock Analysis Report
 
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Concho Resources Inc. (CXO) : Free Stock Analysis Report
 
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