Yahoo Finance Ovintiv (OVV) Down 18.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Ovintiv (OVV). Shares have lost about 18.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ovintiv 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 drivers.
Ovintiv Q4 Earnings Miss Estimates, Revenues Beat
Ovintiv reported fourth-quarter 2022 adjusted earnings per share of 91 cents, which missed the Zacks Consensus Estimate of $1.75. This decline can be attributed to year-over-year higher expenses. The bottom line also underperformed the year-ago quarter’s figure of $1.24 per share.
Total revenues of $3.2 billion decreased 3.8% from the year-ago quarter’s $3.3 billion but beat the Zacks Consensus Estimate of $2.3 billion. This uptick was due to higher-than-expected production and better oil realizations. Total oil production came in at 174,700 barrels of oil equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 131,000 BOE/d.
OVV’s board of directors declared a quarterly dividend of 25 cents per share for its common shareholders of record as of Mar 15, 2023. The dividend will be paid out on Mar 31.
Production & Prices
Total fourth-quarter production was 523,600 BOE/d compared with 508,200 BOE/d in the prior-year period. It beat the Zacks Consensus Estimate of 519,000 BOE/d. Higher volumes can be attributed to natural gas production increasing 5.8% year over year to 1,561 million cubic feet per day (MMcf/d). Liquids production edged up 0.5% to 263,400 BOE/d.
Ovintiv's realized natural gas price was $2.49 per thousand cubic feet compared with the year-ago quarter’s figure of $2.84. The realized oil price increased to $75.85 per barrel from $53.43 in the fourth quarter of 2021.
Costs, Capex & Balance Sheet
Total expenses in the reported quarter increased to $2 billion from the year-ago figure of $1.9 billion.
Ovintiv’s cash from operating activities was $875 million, up from the year-ago figure of $740 million. Its capital investments were $358 million compared with $421 million in the year-ago period. The company generated a non-GAAP free cash flow of $537 billion in the quarter.
As of Dec 31, the company had cash and cash equivalents worth $5 million and long-term debt of $3.6 billion. Its debt-to-capitalization at the end of the reported quarter was 32%.
Guidance
Ovintiv expects capital expenditure of $2.15-$2.35 billion for full-year 2023 and of $600-$650 million for the first quarter of 2023.
The company now projects crude oil and condensate volumes of 165,000-175,000 barrels per day (bpd) for full-year 2023, and of 160,000 bpd for the first quarter of 2023. Natural gas production is estimated in the 1,525–1,575 MMcf/d range for the entire year and at 1,525 MMcf/d for the first quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -22.29% due to these changes.
VGM Scores
At this time, Ovintiv has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. It's no surprise Ovintiv has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Ovintiv Inc. (OVV) : Free Stock Analysis Report
