A month has gone by since the last earnings report for Range Resources Corporation (NYSE:RRC) . Shares have added about 8.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is RRC 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.
Fourth-Quarter 2017 Results
Range Resources Corporation reported fourth-quarter 2017 adjusted earnings of 22 cents per share that surpassed the Zacks Consensus Estimate of 15 cents. The company had incurred a loss of 66 cents in the year-ago quarter.
Total revenues of $679 million beat the Zacks Consensus Estimate of $643 million and surged 168% year over year from $253.5 million.
The fourth-quarter 2017 results were boosted by an increase in oil and gas equivalent production and price realizations, partially offset by higher expenses.
Operational Performance
During the fourth quarter, the company’s production averaged almost 2,170.4 million cubic feet equivalent per day (MMcfe/d). Natural gas made up for 66.5% of total production, while natural gas liquids (NGLs) and oil accounted for the remaining 33.5%.
Total production volume improved 17% from the year-ago quarter but lagged the Zacks Consensus Estimate of 2,180 MMcfe/d.
On a year-over-year basis, oil production rose 25%, while NGL production rose 18%. Moreover, natural gas production jumped 16% year over year.
The company’s total price realization (including the effects of hedges and derivative settlements) averaged $2 per thousand cubic feet equivalent (Mcfe), down 10% year over year. Of this, NGL prices fell 14% to $9.65 per barrel while crude oil prices declined 17% to $50.95 per barrel, both on a year-over-year basis. Natural gas prices were down 8% year over year to $1.77 per Mcf.
Expenses
Total expenses were $806.9 million, up 58% year over year.
Financials
At the end of the quarter, the company had long-term debt of approximately $4,108.8 million with a debt-to-capitalization ratio of 41.6%. The company incurred expenditures of $369 million in the fourth quarter for drilling and completion of 48 net wells.
Guidance
For the first quarter of 2018, the company estimates production at about 2.18 billion cubic feet equivalent (Bcfe) per day. For 2018, production is projected at about 2.23 Bcfe per day. With this, the annual output is likely to rise 11%.
The upstream energy player expects the 2018 capital budget at $941 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been four revisions higher for the current quarter compared to one lower.
Range Resources Corporation Price and Consensus
VGM Scores
At this time, RRC has a nice Growth Score of B, however its Momentum is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, RRC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Range Resources Corporation (RRC): Free Stock Analysis Report
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