A month has gone by since the last earnings report for Range Resources (RRC). Shares have added about 4.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Range Resources 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 catalysts.
Range Resources Q4 Earnings and Revenues Beat
Range Resources 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.
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 2,325-2,345 MMcfe/d. With this, the annual output is likely to rise 5.6-6.5%.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -27.55% due to these changes.
VGM Scores
Currently, Range Resources has a great Growth Score of A, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Range Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Range Resources Corporation (NYSE:RRC
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