It has been about a month since the last earnings report for Pioneer Natural Resources (PXD). Shares have lost about 2.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Pioneer Natural Resources due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Pioneer Natural Q1 Earnings Beat on Permian Operations
Pioneer Natural 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.
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.
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%.
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 16.01% due to these changes.
At this time, Pioneer Natural Resources has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Pioneer Natural Resources has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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