It has been about a month since the last earnings report for Pioneer Natural Resources (PXD). Shares have lost about 4.7% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important catalysts.
Pioneer Natural Q4 Earnings Miss Estimates, Revenues Beat
Pioneer Natural Resources Company reported fourth-quarter 2018 earnings of $1.18 per share, excluding one-time items, which failed to beat the Zacks Consensus Estimate of $1.40 and fell from the year-ago quarter’s $1.22. Lower realized prices from oil and natural gas led to the underperformance.
Revenues and other income surged 75.4% year over year to $2,677 million from $1,526 million a year ago. The top line exceeded the consensus mark of $2,331 million, thanks to higher activities in the prolific Permian Basin.
In a separate release, the company announced approvals from board of directors to double its semi-annual dividend to 32 cents per share from 16 cents. Pioneer Natural expects the dividend to be paid on Apr 12, to the stockholders of record as of Mar 29.
Total production in the reported quarter averaged 319.6 thousand barrels of oil equivalent per day (MBOE/d), which improved 4.8% year over year and was in line with the Zacks Consensus Estimate. The upside can be attributed to higher activities in the Permian Basin.
Oil production averaged 199.2 thousand barrels per day (MBbl/d), up 10.8% year over year and was in line with the Zacks Consensus Estimate. Natural gas liquids (NGLs) production was almost flat with both the Zacks Consensus Estimate and the year-ago quarter figure. Natural gas production amounted to 351.2 million cubic feet per day (MMcf/d) but was down from the year-ago quarter’s 377.1 MMcf/d. The figure was flat with the Zacks Consensus Estimate.
On an oil equivalent basis, average realized price was $38.16 per barrel in the reported quarter compared with $38.68 a year ago. The company reported its average realized crude price at $49.80 a barrel, down from $52.81 in the December quarter of 2018.
Average natural gas price dropped 30.8% year over year to $1.75 per thousand cubic feet (Mcf). Natural gas liquids were sold at $26.88 a barrel, up from $21.64 in the year-ago quarter.
Cash, Debt and Capex
At the end of the quarter under review, cash balance totaled $825 million. Long-term debt summed $2,284 million, reflecting a debt-to-capitalization ratio of 15.9%.
Proved Reserves Grow
As of Dec 31, 2018, Pioneer Natural’s total proved reserves were reported at 1.1 billion barrels of oil equivalent (BBOE), up from 985.4 million barrels of oil equivalent (MMBOE) as of Jan 1, 2018.
Pioneer Natural expects production in the Permian Basin in the range of 320-335 MBOE/D through 2019. This reflects a year-over-year increase of 12% to 17%.
For the first quarter, the company projects production from the prolific play in the band of 302-317 MBOE/D.
Through 2019, the upstream energy player intends to invest capital in the range of $3.1 billion to $3.4 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -8.87% due to these changes.
Currently, Pioneer Natural Resources has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Pioneer Natural Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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