Why Is Cabot Oil & Gas (COG) Down 4.8% Since the Last Earnings Report?
A month has gone by since the last earnings report for Cabot Oil & Gas Corporation COG. Shares have lost about 4.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2017 Results
Cabot Oil & Gas reported first quarter earnings per share – adjusted for special items – of $0.17, surpassing the Zacks Consensus Estimate of $0.14. Further, it compares favorably with the year-ago quarter’s adjusted loss of $0.15.
Better results were driven by improvement in the commodity pricing environment that led to higher realized natural gas prices. Reduced expenses and increased revenues also led to improved results.
Houston, TX-based Cabot’s quarterly revenues improved 83.6% year over year to $316.5 million and was above the Zacks Consensus Estimate of $472 million.
Volume Analysis
Cabot’s overall production during the quarter totaled 170.1 billion cubic feet equivalent (Bcfe) – 96.2% gas – up 6% from the prior-year quarter volume of 160.3 Bcfe. Natural gas output was 163.8 Bcf, while crude oil production came in at 921 thousand barrels (MBbl) and natural gas liquids came at 123.5 thousand barrels (MBbl).
Realized Prices
The average realized natural gas price improved 77% from the year-ago quarter to $2.64 per thousand cubic feet, while average crude/condensate price realization rose 14% to $46.73 per barrel. Meanwhile, natural gas liquids fetched $20.71 per barrel, an increase of 187% compared to the first quarter of 2016.
Costs & Expenses
Total operating expenses were 4% lower than the first quarter of 2016, rising to $756.2 million. In particular general and administrative expenses were down 10% to $15.4 million. Further, Cabot’s depreciation, depletion and amortization expenses were down by 16.5% from the year-ago period to $135.1 million.
Drilling Statistics, Capital Expenditure & Balance Sheet
Cabot drilled 21 net wells and completed 24 during the quarter. Operating cash flows were $269.3 million for the quarter as against $67.1 million in the prior-year quarter. Capital expenditures totaled $208.4 million (up 126%). As of Mar 31, 2017, the company had $1,520.9 million in long-term debt with a debt-to-capitalization ratio of 36%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been seven revisions higher for the current quarter compared to one lower. In the past month, the consensus estimate has shifted by 21.9% due to these changes.
Cabot Oil & Gas Corporation Price and Consensus
Cabot Oil & Gas Corporation Price and Consensus | Cabot Oil & Gas Corporation Quote
VGM Scores
At this time, Cabot Oil & Gas' stock has a great Growth Score of 'A', though it is lagging a bit on the momentum front with a 'B'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Click for Free Cabot Oil & Gas Corporation (COG) Stock Analysis Report >>
To read this article on Zacks.com click here.
Zacks Investment Research
