It has been about a month since the last earnings report for Pioneer Natural Resources (PXD). Shares have added about 1.7% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pioneer Natural 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 the most recent earnings report in order to get a better handle on the important drivers.
Pioneer Natural Q2 Earnings Beat Estimates, Revenues Miss
Pioneer Natural Resources Company (NYSE:PXD) reported second-quarter 2019 earnings per share of $2.01, excluding one-time items, beating the Zacks Consensus Estimate of $1.88 and improving from the year-ago quarter’s $1.41.
Revenues and other income declined 9% year over year to $1,923 million from $2,111 million a year ago. The top line also missed the consensus mark of $2,378 million.
The strong quarterly earnings were attributed to ramped-up Permian operations, offset partially by lower oil equivalent price realizations.
Dividend Hike, Share Buyback
The company announced that it has received approval from the board of directors to hike quarterly dividend to 44 cents per share. The new dividend, representing a 175% sequential increase, is likely to be paid on Oct 10 to shareholders of record as of Sep 27.
Through the June quarter, the explorer bought back $200 million of shares as part of its $2-billion repurchase program.
Production
Total production in the reported quarter averaged 334.2 thousand barrels of oil equivalent per day (MBOE/d), up almost 2% year over year. The upside can be attributed to higher activities in the Permian Basin.
Oil production averaged 207.4 thousand barrels per day (MBbl/d), up 12% year over year. Natural gas liquids (NGLs) production of 67.1 MBbl/d was higher than the year-ago quarter figure of 64.5 MBbl/d. However, natural gas production amounted to 357.9 million cubic feet per day (MMcf/d) but was down from the year-ago quarter’s 466.4 MMcf/d.
Price Realization
On an oil equivalent basis, average realized price was $39.35 per barrel in the reported quarter compared with $43.12 a year ago. The company reported average realized crude price at $55.50 a barrel, down from $61.20 in the June quarter of 2018.
Average natural gas price dropped 55% year over year to 89 cents per thousand cubic feet (Mcf). Natural gas liquids were sold at $19.63 a barrel, down from $28.83 a year ago.
Cash, Debt and Capex
At the end of the quarter under review, cash balance totaled $643 million. Long-term debt summed $1,837 million, reflecting a debt-to-capitalization ratio of 16.2%.
Through the June quarter, the company spent $730 million for operations in the Permian basin.
Guidance
Pioneer Natural continues to project production in the Permian Basin at the range of 320-335 MBOE/D for 2019. This suggests a year-over-year increase of 12% to 17%.
For the September quarter, the company projects production at the band of 333-348 MBOE/D.
For 2019, the upstream energy player’s recently revised capital budget is at the band of $3.05 billion to $3.25 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, Pioneer Natural Resources has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, 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
Pioneer Natural Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Pioneer Natural Resources Company (PXD): Free Stock Analysis Report
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