Cabot Oil (COG) Q2 Earnings and Revenues Beat Estimates

Cabot Oil & Gas Corporation’s COG second-quarter 2020 net income per share — adjusted for special items — of 5 cents beat the Zacks Consensus Estimate of 3 cents. Better-than-expected results can be attributed to higher-than-anticipated production volumes. Notably, Cabot’s overall production came in at 202.9 billions of cubic feet equivalent (Bcfe), outperforming the Zacks Consensus Estimate of 201 Bcfe. However, the bottom line plunged 86.1% from the year-ago figure of 36 cents as natural gas prices declined.

The company’s quarterly revenues of $332.35 million surpassed the Zacks Consensus Estimate of $298 million. However, the top line decreased 37.8% from the prior-year number of $534.12 million.

Production, Prices, Costs & Drilling Statistics

In the quarter under review, Cabot’s overall production summed 202.9 Bcfe comprising 100% natural gas. The figure was 5.1% lower than the prior-year volume of 213.8 Bcfe. 

Average realized natural gas price (excluding hedges) fell to $1.42 per thousand cubic feet from the year-ago quarter’s $2.20 and also missed the Zacks Consensus Estimate of $1.46.

Total operating expenses were $278.4 million, down 3% from the figure reported in second-quarter 2019. The transportation and gathering costs fell 4.55% year over year to $135.25 million.

Notably, total average unit costs increased to $1.44 per thousand cubic feet equivalent (Mcfe) from the year-ago figure of $1.41.

Cabot drilled 19 wells and completed 36 during the quarter.

Cabot Oil Gas Corporation Price, Consensus and EPS Surprise

Cabot Oil Gas Corporation Price, Consensus and EPS Surprise

Cabot Oil Gas Corporation price-consensus-eps-surprise-chart | Cabot Oil Gas Corporation Quote

Financial Position

Operating cash flows were $13.6.4 million (down 58.2% year over year) while capital expenditures totaled $182.5 million (down 19.2%). As of Jun 30, 2020, the company had cash and cash equivalents worth $117.2 million and total debt of $1.05 billion with debt-to-capitalization of 32.5%.

In a separate press release, Cabot’s board of directors approved a regular dividend of 10 cents per share on the company's common stock, payable Aug 27, 2020 to all its shareholders of record as of Aug 13, 2020.

Guidance

For the third quarter of 2020, Cabot provided its net production outlook in the range of 2,400-2,450 million cubic feet equivalent a day.

Meanwhile, this Houston-based company reiterates its capital expense projection at $575 million. Also, the company maintains its production view in the 2.35-2.37 Bcf per day band for the full year.

Zacks Rank & Key Picks

Cabot currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Halliburton Company HAL, Core Laboratories NV CLB and Newpark Resources Inc NR, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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