Range Resources (RRC) Beats On Q4 Earnings And Revenues

Range Resources Corporation (NYSE:RRC) delivered fourth-quarter 2018 adjusted earnings of 21 cents per share that surpassed the Zacks Consensus Estimate of 17 cents. The company generated earnings of 22 cents in the year-ago quarter.

In the quarter under review, total revenues amounted to $1,072.6 million, which beat the Zacks Consensus Estimate of $714 million and surged 58% year over year from $679 million.

The quarterly results were driven by increased natural gas liquids (NGLs) price realizations, partially offset by higher expenses and lower production.

In 2018, the company reported adjusted earnings of $1.13 per share, which beat the Zacks Consensus Estimate of $1.08. The company generated earnings of 58 cents in 2017.

Total revenues improved 25.7% year over year to $3,282.6 million. The figure also surpassed the Zacks Consensus Estimate of $2,820.0 million.

Operational Performance

During the fourth quarter, the company’s production averaged almost 2,148.9 million cubic feet equivalent per day (MMcfe/d), down from 2,170.4 MMcfe/d in the prior-year quarter. Natural gas contributed 69% to total production, while NGL and oil accounted for the remaining 31%.

On a year-over-year basis, oil production plunged34%, while NGL and natural gas production declined 5% and3% year over year, respectively.

Production in Appalachian increased 5% on a year-over-year basis and totaled 1,893 MMcfe/d.

The company’s total price realization (including the effects of hedges and derivative settlements) averaged $1.85 per thousand cubic feet equivalent (Mcfe), down 7% year over year. Of this, NGL prices rose 19% year over year to $11.45 per barrel.

Natural gas prices declined11% to $1.57, per Mcf while crude oil prices declined 2% to $49.69 per barrel, both on a year-over-year basis.

Expenses

Total expenses were $2,905.8 million, up 260% year over year.

Financials

At the end of the quarter, the company had long-term debt of approximately $3,836.9 million with a debt-to-capitalization ratio of 48.6%. The company incurred expenditures worth $158 million in the fourth quarter for drilling and completion of 17 net wells.

Guidance

For the first quarter of 2019, the company estimates production at about 2,225MMcfe/d. For 2019, production is projected between 2,325-2,345MMcfe/d. With this, the annual output is likely to rise5.6-6.5%.

The upstream energy player projects 2019 capital budget at $756 million, down from $910 million in 2018.

Reserves

As of Dec 31, 2018, total proved reserves were 18.1 trillion cubic feet equivalent (Tcfe), up 18% from the level on Dec 31, 2017.

Q4 Price Performance

During the October-December quarter of 2018, Range Resources’ shares lost 55.5% against the industry’s 48.8% decline.

Zacks Rank & Key Picks

Range Resources carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector can opt for some better-ranked stocks as given below.

CrossAmerica Partners L.P. (NYSE:CAPL) is involved in the wholesale distribution of motor fuels, comprising gasoline and diesel fuel. The company delivered average positive earnings surprise of 436.7% in the last four quarters. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

San Antonio, TX-based NuStar Energy L.P. (NYSE:NS) is a midstream energy company. For 2019, the bottom line, which has witnessed one upside revision in the past 30 days, is expected to grow 64.2% year over year. The company currently holds a Zacks Rank #2 (Buy).

Madrid, Spain-based Repsol (MC:REP), S.A. (OTC:REPYY) is an integrated energy company. The bottom line for 2019 is expected to increase 13.7% year over year. The company delivered average positive earnings surprise of 9% in the trailing four quarters. The stock currently has a Zacks Rank #2.

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