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Continental (CLR) Q1 Earnings Miss Estimates, Revenues Beat

Zacks Equity Research
·4 mins read

Continental Resources, Inc. CLR reported first-quarter 2020 adjusted loss of 8 cents per share, wider than the Zacks Consensus Estimate of a loss of 3 cents. In the year-earlier quarter, the upstream energy player reported a profit of 58 cents per share. The underperformance can be attributed to lower oil equivalent price realizations – led by coronavirus-dented energy demand – partially offset by rise in production volumes.

Revenues of $881 million beat the Zacks Consensus Estimate of $873 million. However, the figure declined from $1,124 million in the year-ago quarter.

Continental Resources, Inc. Price, Consensus and EPS Surprise

 

Continental Resources, Inc. Price, Consensus and EPS Surprise
Continental Resources, Inc. Price, Consensus and EPS Surprise

Continental Resources, Inc. price-consensus-eps-surprise-chart | Continental Resources, Inc. Quote

Production Rises

Production from continuing operations averaged 360,841 barrels of oil equivalent per day (BOE/D) in the quarter, higher than 332,236 BOE/D in the year-ago quarter. This was supported by output growth at the company’s South and Bakken assets.

Oil production in the quarter came in at 200,671 barrels per day (Bbls/d), up from 193,921 Bbls/d a year ago. Natural gas production jumped from 829,891 thousand cubic feet per day (Mcf/d) in first-quarter 2019 to 961,022 Mcf/d.

Oil Equivalent Price Realization Declines

Crude oil equivalent price in the quarter fell to $24.44 per barrel from $35.56 in the prior-year quarter. Natural gas was sold at 90 cents per Mcf, down from $2.56 in the year-ago quarter. Moreover, average realized price for oil was $39.64 a barrel, down from $50.05 in the prior-year quarter.

Total Expenses Jump

Total operating expenses of $1,074.4 million in the first quarter rose from $819.3 million in the March quarter of 2019. Total production cost rose to $118.5 million from $106.9 million in the year-ago quarter. Exploration costs in the quarter were $11.6 million compared with $1.8 million in the year-ago quarter. Transportation costs rose to $60.5 million from the year-ago level of $49.1 million.

Capital Expenditure & Balance Sheet

In first-quarter 2020, total capital expenditure (excluding acquisitions) was $650.7 million. As of Mar 31, 2020, the company had total cash and cash equivalents of $517.6 million as well as debt of $5,964.6 million (excluding current maturities), with a debt-to-capitalization of 48.2%.

Guidance

Continental has withdrawn all guidance for 2020 owing to extreme volatility due to the coronavirus pandemic. Notably, the slump in energy demand owing to the outbreak has compelled oil producers to curtail production volumes across several operations.

Zacks Rank & Stocks to Consider

Continental currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked stocks in the energy sector are Murphy USA Inc MUSA, Key Energy Services, Inc. KEGX and CNX Resources Corporation CNX. While Key Energy and Murphy sport a Zacks Rank #1 (Strong Buy), CNX Resources carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA is likely to see earnings growth of 7% in the next five years.

Key Energy is expected to witness bottom-line growth of 97.2% in 2020.

CNX Resources has witnessed upward estimate revisions for 2020 bottom line in the past 60 days.

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CNX Resources Corporation. (CNX) : Free Stock Analysis Report
 
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Key Energy Services, Inc. (KEGX) : Free Stock Analysis Report
 
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