A month has gone by since the last earnings report for EQT Corporation (EQT). Shares have added about 11.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is EQT Corporation due for a pullback? 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 drivers.
EQT Corp Q3 Earnings Beat Estimates on Higher Prices
EQT Corp reported third-quarter adjusted earnings from continuing operations of $1.04 per share, beating the Zacks Consensus Estimate of 99 cents. The bottom line improved substantially from the year-ago quarter’s profit of 12 cents.
Adjusted operating revenues increased to $1,661.4 million from $1,155 million in the prior-year quarter. However, the top line missed the Zacks Consensus Estimate of $1,736 million.
The strong quarterly earnings were driven by the higher realization of commodity prices.
Sales volumes declined to 487.7 billion cubic feet equivalent (Bcfe) from the year-ago quarter’s figure of 495 Bcfe. Natural gas sales volume was 463.9 Bcf in the third quarter, marginally down from 464.6 Bcf. Total liquids sales volume was 3,969 thousand barrels (MBbls) versus the year-ago period’s 5,074 MBbls.
Commodity Price Realizations
The average realized price was $3.41 per thousand cubic feet of natural gas equivalent (Mcfe), up from the year-ago quarter’s $2.33 per Mcfe. Natural gas price was $8.62 per Mcf, up from $4.21. Oil prices were $63.20 per barrel, up from $46.79 in third-quarter 2021. Also, the ethane sales price was $15.68 per barrel in the third quarter, higher than the year-ago quarter’s $9.22.
Total operating expenses were $1.42 per Mcfe in the third quarter of 2022, up from $1.25 in the prior-year quarter.
Processing expenses were 11 cents per Mcfe, higher than the year-ago quarter’s 10 cents. Lease operating expenses increased to 8 cents from 6 cents.
EQT Corp’s adjusted operating cash flow was $939.7 million in the quarter, up from $396.1 million a year ago. Free cash flow in the quarter was $590.6 million, up from $99.1 million.
Capex & Balance Sheet
Total capital expenditure amounted to $355.6 million in the third quarter, up from $297.7 million a year ago.
As of Sept 30, 2022, the company had $87.5 million in cash and cash equivalents. Net debt was $4,681.8 million.
For 2022, EQT Corp revised its sales guidance downward to 1,925-1,975 Bcfe from the prior stated 1,950-2,050 Bcfe. For the fourth quarter, total sales volumes are expected to be 450-475 Bcfe.
The company expects total per-unit operating costs of $1.28-$1.40 per Mcfe for the year. Adjusted earnings before interest, taxes, depreciation and amortization are expected to be $3.45-$3.55 billion. Capital expenditure for the year is projected at $1.4-$1.475 billion.
EQT Corp’s free cash flow is projected to be $1.9-$2 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -18.98% due to these changes.
Currently, EQT Corporation 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 B on the value side, putting it in the second quintile 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, EQT Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
EQT Corporation belongs to the Zacks Oil and Gas – Exploration and Production – United States industry. Another stock from the same industry, Matador Resources (MTDR), has gained 1.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Matador reported revenues of $840.93 million in the last reported quarter, representing a year-over-year change of +78%. EPS of $2.68 for the same period compares with $1.25 a year ago.
Matador is expected to post earnings of $2.29 per share for the current quarter, representing a year-over-year change of +81.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -5.8%.
Matador has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Image and article originally from www.nasdaq.com. Read the original article here.