Yahoo Finance Magnolia (MGY) Q1 Earnings Beat Estimates, Revenues Miss
Magnolia Oil & Gas Corp MGY reported first-quarter 2023 adjusted net income of 56 cents per share, which beat the Zacks Consensus Estimate of 53 cents. The outperformance can be primarily attributed to a healthy 10.5% increase in production volumes year over year. The bottom line deteriorated from the year-ago quarter’s level of 90 cents due to a decline in commodity prices.
Total revenues came in at $308.38 million, which missed the Zacks Consensus Estimate of $323 million. The top line declined 18.4% from $377.84 million recorded in the year-ago period.
Magnolia declared a cash dividend of 11.5 cents per share of Class A common stock and a cash distribution of 11.5 cents per Class B unit, payable on Jun 1, 2023, to shareholders of record as of May 11, 2023. The company repurchased 2.4 million of its Class A common shares for $51.3 million in the reported quarter.
Magnolia Oil & Gas Corp Price, Consensus and EPS Surprise
Magnolia Oil & Gas Corp price-consensus-eps-surprise-chart | Magnolia Oil & Gas Corp Quote
Production & Prices
Average daily total output of 79,342 barrels of oil equivalent per day (boe/d) was up from the year-ago quarter’s figure of 71,835 boe/d. Oil and gas production increased a little more than 10.5% year over year. Oil volumes came in at 35,788 barrels per day (bpd), up 14.4% from that reported in the first quarter of 2022. The same beat the Zacks Consensus Estimate of 35,726 bpd.
The average realized crude oil price was $74.24 per barrel, indicating a 20.4% decline from the year-ago period’s level of $93.28. The average realized natural gas liquids price was $22.90 per barrel, implying a 38% deterioration from the year-ago period’s figure. Natural gas prices decreased 551.9% year over year to $2.20 per thousand cubic feet. MGY recorded $43.1 per barrel of oil equivalent (boe) compared with $58.4 a year ago.
Balance Sheet & Capital Expenditure
As of Mar 31, Magnolia had $667.3 million of cash and cash equivalents, and long-term debt of $391 million. The total debt-to-total capital was 18.1%.
The company spent $139.7 million on its capital program in the reported quarter. Operating expenses increased to $181.4 million from $142 million in the year-ago period.
Guidance
Magnolia plans to spend somewhere around $100 million on drilling and completion (D&C) activities in the second quarter of 2023. It also expects to spend in the range of $440-$460 million on D&C activities for the full year.
The company projects the diluted share count for the second quarter to be approximately 212 million.
MGY plans to offer a $3.00 per barrel discount to Magellan East Houston, leaving it unhedged for all oil and natural gas production.
Zacks Rank and Key Picks
Currently, Magnolia carries a Zacks Rank #3 (Hold). Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI, sporting a Zacks Rank #1 (Strong Buy), and Marathon Petroleum MPC and Ranger Energy Services RNGR, both holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy: CVI is worth approximately $2.63 billion. CVI currently pays investors $2.00 per share, or 7.63%, on an annual basis.
The company currently has a forward P/E ratio of 6.59. In comparison, its industry has an average forward P/E of 8.60, which means CVI is trading at a discount to the group.
Marathon Petroleum: MPC is valued at around $58.02 billion. It delivered an average earnings surprise of 20.91% for the last four quarters and its current dividend yield is 2.30%.
The company currently has a forward P/E ratio of 6.36. In comparison, its industry has an average forward P/E of 9.10, which means MPC is trading at a discount to the group.
Ranger Energy Services: RNGR is valued at around $242.99 million. In the past year, its shares have gained 16.8%.
Ranger Energy Services currently has a forward P/E ratio of 5.30. In comparison, its industry has an average forward P/E of 11.60, which means RNGR is trading at a discount to the group.
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