Pioneer Natural (PXD) Q3 Earnings Miss, Revenues Beat

Pioneer Natural Resources Company (NYSE:PXD) reported third-quarter 2016 adjusted earnings of 13 cents per share that missed the Zacks Consensus Estimate of 17 cents. Notably, the company had posted adjusted loss of 1 cent per share in the year-earlier quarter.

Revenues and other income in the quarter plunged 47% year over year to $1,186 million from $2,237 million. The top line, however, beat the Zacks Consensus Estimate of $1,022 million.

Production

Total production in the reported quarter averaged approximately 239 thousand barrels of oil equivalent per day (MBOE/d), up 13.3% year over year. Robust yield from core growth assets – particularly Spraberry field and Wolfcamp Shale – boosted growth.

Oil production averaged 133.8 thousand barrels per day (MBbl/d), up 22% year over year. Natural gas liquids (NGLs) production jumped 18.3% year over year to 49.2 MBbl/d. Natural gas production decreased to 332.4 million cubic feet per day (MMcf/d) from the year-ago level of 360 MMcf/d.

Price Realization

On an oil equivalent basis, average realized price was $29.24 per barrel in the reported quarter as against $28.75 a year ago. The average realized price for oil was $41.44 per barrel compared with $42.46 in third-quarter 2015.

Average natural gas price slipped 4% year over year to $2.43 per thousand cubic feet (Mcf). Natural gas liquids were sold at $12.46 per barrel as against $12.39 in the year-ago quarter.

Cash, Debt and Capex

At the end of the quarter, cash balance was $891 million. Long-term debt was $2,726 million, which represents a debt-to-capitalization ratio of 20.7% as against 26.1% in the preceding quarter.

Capital Outlay

For 2016, Pioneer plans to spend $2.1 billion in total. The estimation has been raised from the preliminary forecast in first-quarter 2016. Of this, the company has planned drilling capex of $1.95 billion and capital for vertical integration of $150 million.

An amount of $1,810 million has been allocated for the northern Spraberry/Wolfcamp area and $60 million has been set aside for the southern Wolfcamp joint venture. The company will also spend $60 million for Eagle Ford Shale and $20 million for other assets.

Guidance

Pioneer expects production to average between 237 MBOE/d and 242 MBOE/d in the fourth quarter of 2016. The company has increased its 2016 production growth forecast to 14% from 13%.

Production costs are anticipated between $7.75 per BOE and $9.75 per BOE. Depletion, depreciation and amortization expenses are expected to average between $17.50 per BOE and $19.50 per BOE. The projected range for general and administrative expenses is $78–$83 million, for interest expenses is $45–$50 million and for other expenses is $65–$75 million. The company estimates exploration and abandonment expenses in the range of $20–$30 million, while the expected tax rate is estimated in the 35–40% band.

Zacks Rank

Pioneer Natural Resources currently has a Zacks Rank #3 (Hold).

Some better-ranked players from the same sector are Enbridge Energy Partners, LP (NYSE:EEP) , Braskem SA (NYSE:BAK) and Enviva Partners, LP (NYSE:EVA) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enbridge Energy Partners has an impressive earnings surprise history. The partnership posted positive earnings surprise in three of the last four quarters. It reported a positive earnings surprise of 69.23% in the preceding quarter.

Braskem SA posted a positive earnings surprise of 105.45% in the year-ago quarter.

Enviva Partners has a mixed earnings surprise history. The partnership posted positive earnings surprises in two of the last four quarters. It reported a positive earnings surprise of 20.51% in the preceding quarter.

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