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A month has gone by since the last earnings report for WPX Energy, Inc. WPX. Shares have added about 5.6% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is WPX due for a pullback? 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 catalysts.
WPX Energy Q1 Loss Wider Than Expected, Revenues Beat
WPX Energy Inc. , an independent oil & gas operator, incurred a loss of 6 cents per share in the first quarter of 2018, wider than the Zacks Consensus Estimate of a loss of 2 cents. However, the quarterly loss was narrower than the year-ago quarter’s figure of 15 cents.
WPX Energy’s quarterly revenues of $374 million surpassed the Zacks Consensus Estimate of $373 million by 0.4%. However, total revenues declined 5.3% from $395 million in the year-ago quarter.
Highlights of the Release
Total production in the first quarter was 102,700 barrels oil equivalent per day, up 76.0% year over year. Total liquids accounted for nearly 79% of the total production, reflecting the company’s increasing focus on oil.
Oil production in the quarter was 65,800 barrels per day, nearly 69% higher than the year-ago quarter level of 38,900 barrels per day, thanks to 149% increase in Delaware Basin volumes in the past 12 months.
Total expenses were $368 million, up 65.8% from $222 million in the year-ago quarter.
Interest expenses in the reported quarter were $46 million, down 2.1% from $47 million in the prior-year quarter.
Realized Prices & Hedges
Realized oil prices in the quarter were $60.91 per barrel, up 34.4% from the year-ago quarter.
Realized natural gas prices were $1.44 per thousand cubic feet, down 33.9%. Realized prices for natural gas liquids were up 35.7% to $22.14 per barrel.
For the remaining of 2018, WPX Energy has 57,500 barrels per day of oil hedged at a weighted average price of $52.82 per barrel. The company also has 130,000 MMBtu per day of natural gas hedged at a weighted average price of $2.99 per MMBtu.
WPX Energy generated $681 million of cash and cash equivalents as of Mar 31, 2018 compared with $189 million at the end of 2017.
Long-term debt as of Mar 31, 2018 was $2,576 million, practically unchanged from 2017 end levels.
Net cash from operating activities in the first quarter of 2018 was $145 million compared with $22 million in the first quarter of 2017. For the same period, capital expenditure was $321 million compared with $237 million in the year-ago period.
WPX Energy reiterated its total production for 2018 to be within 117-126 thousand barrels of oil-equivalent per day, within which oil production amounts to 75-80 thousand barrels per day.
WPX Energy’s capital budget for continuing operations and midstream equity investment for 2018 is expected to be in the range of $1,160-$1,310 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. There have been five revisions higher for the current quarter compared to three lower. In the past month, the consensus estimate has shifted by 170.8% due to these changes.
WPX Energy, Inc. Price and Consensus
WPX Energy, Inc. Price and Consensus | WPX Energy, Inc. Quote
At this time, WPX has a strong 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.
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, WPX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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