Why Is Pioneer Natural Resources (PXD) Down 57.6% Since Last Earnings Report?

It has been about a month since the last earnings report for Pioneer Natural Resources (PXD). Shares have lost about 57.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Pioneer Natural Resources due for a breakout? 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.

Pioneer Natural Q4 Earnings & Revenues Beat Estimates

Pioneer Natural Resources Company (NYSE:PXD) reported fourth-quarter 2019 earnings per share of $2.36, excluding one-time items, beating the Zacks Consensus Estimate of $2.12. Further, the bottom line surged from the year-ago quarter’s $1.18.

Revenues and other income declined 1.3% year over year to $2,643 million from $2,677 million a year ago. However, the top line beat the consensus mark of $2,493 million.

The company reported strong quarterly earnings, thanks to higher production and average realized prices on an oil-equivalent basis.

Dividend Hike & Share Buyback

In a separate release, the company hiked quarterly dividend by 25% to 55 cents per share. The increased dividend is likely to be paid on Apr 14, to stockholders of record as of Mar 31.

During the December quarter of 2019, the explorer bought back $22 million of shares as part of its $2-billion repurchase program. As of Feb 19, the upstream firm repurchased $749 million worth of shares under the authorized buyback plan.

Production

Total production in the reported quarter was 363.4 thousand barrels of oil equivalent per day (MBOE/d), up 14% year over year. The upside can be attributed to strong contributions from the Permian Basin.

Oil production was 220.3 thousand barrels per day (MBbl/d), up 10.6% year over year. Natural gas liquids (NGLs) production of 80.2 MBbl/d was higher than the year-ago quarter’s 61.9 MBbl/d. Moreover, natural gas production amounted to 377.3 million cubic feet per day (MMcf/d), up from the year-ago quarter’s 351.2 MMcf/d.

Price Realization

On an oil-equivalent basis, average realized price was $40.36 per barrel in the reported quarter compared with $38.16 a year ago. The company reported average realized crude price of $56.01 a barrel, up from $49.80 in the December-end quarter of 2018.

Average natural gas price increased 26.3% year over year to $2.21 per thousand cubic feet (Mcf). However, natural gas liquids were sold at $18.60 a barrel, down from $26.88 a year ago.

Cash, Debt and Capex

At the end of the quarter under review, cash balance totaled $631 million. Long-term debt summed $1,839 million, reflecting a debt-to-capitalization ratio of 15.9%.

During the December-end quarter, the company spent $627 million for operations in the Permian Basin, which includes expenditure for gas processing and water infrastructure.

Proved Reserves

As of Dec 31, 2019, the company’s proved reserves were recorded at 1,136 million barrels of oil equivalent (MMBoE), up from a year ago’s 1,049 MMBoE.

Guidance

For 2020, the upstream energy player projects capital budget for drilling, completions and facilities in the band of $3-$3.3 billion. Total oil equivalent volumes for 2020 has been estimated in the band of 383 to 403 MBoE/D. Notably, the company expects oil production for 2020 in the range of 235 to 245 MBbl/D.

For the March-end quarter, the company projects oil production of 217-227 MBbl/D. The upstream energy firm expects total production for the quarter in the range of 361-376 MBoE/D.

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 -15.84% due to these changes.

VGM Scores

Currently, Pioneer Natural 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 A. 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, Pioneer Natural Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.