EQT Corporation (EQT) Up 16.8% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for EQT Corporation (EQT). Shares have added about 16.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is EQT Corporation 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.

EQT Corporation Q1 Earnings Miss Estimates

EQT Corporation reported first-quarter 2022 adjusted earnings from continuing operations of 81 cents per share, missing the Zacks Consensus Estimate of $1.04. The bottom line improved from the year-ago quarter’s profit of 30 cents.

Adjusted operating revenues increased to $1,569 million from $950 million in the prior-year quarter. The top line, however, missed the Zacks Consensus Estimate of $1,677 million.

The lower-than-expected results stemmed from higher operating expenses. This was offset partially by higher sales volumes and commodity prices.

Q1 Operations

Production

Sales volumes increased to 492 billion cubic feet equivalent (Bcfe) per day from the year-ago quarter’s figure of 415 Bcfe. Natural gas sales volume was 466.1 Bcf in the first quarter, up from 390.3 Bcf. Total liquids sales volume was 4,357 thousand barrels (MBbls) versus the year-ago period’s 4,148 MBbls.

Commodity Price Realizations

The average realized price was $3.19 per thousand cubic feet of natural gas equivalent (Mcfe), up from the year-ago quarter’s level of $2.61 per Mcfe. Natural gas price was recorded at $5.13 per Mcf, up from $2.84. Oil prices were recorded at $85.55 per barrel, up from $61.98 in first-quarter 2021. Also, the ethane sales price was $10.54 per barrel in the first quarter, higher than the year-ago quarter’s level of $6.66.

Expenses

Total operating expenses were $1.33 per Mcfe in the first quarter of 2022, up from $1.31 in the prior-year quarter.

Processing expenses were 10 cents per Mcfe, in line with the year-ago quarter. Lease operating expenses increased to 8 cents from 7 cents.  However, gathering expenses were down to 65 cents per Mcfe from 68 cents. Transmission costs were 30 cents per Mcfe, flat year over year.

Cash Flows

EQT Corporation’s adjusted operating cash flow was $888.5 million in the quarter, up from $495.4 million a year ago. Free cash flow in the quarter was $580.2 million, up from the year-ago quarter’s free cash outflow of $258.5 million.

Capex & Balance Sheet

Total capital expenditures amounted to $310.1 million in the first quarter, up from $238.2 million a year ago.

As of Mar 31, 2022, the company had $16.9 million in cash and cash equivalents. Net debt was reported at $5,033.4 million.

Guidance

EQT Corporation projects 2022 sales volumes at 1,950-2,050 Bcfe. Capital expenditure for the year is projected at $1.300 billion to $1.450 billion.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

Currently, EQT Corporation has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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. Notably, EQT Corporation has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

EQT Corporation belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, Range Resources (RRC), has gained 12% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

Range Resources reported revenues of $986.66 million in the last reported quarter, representing a year-over-year change of +57.6%. EPS of $1.18 for the same period compares with $0.30 a year ago.

Range Resources is expected to post earnings of $1.07 per share for the current quarter, representing a year-over-year change of +345.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -3%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Range Resources. Also, the stock has a VGM Score of A.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
EQT Corporation (EQT) : Free Stock Analysis Report
 
Range Resources Corporation (RRC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research