) fourth quarter 2012 adjusted earnings decreased 18.6% year over
year to 48 cents per share but surpassed the Zacks Consensus
Estimate of 42 cents. The year-over-year decrease was primarily
due to a 15.9% reduction in the average wellhead sales price.
For full-year 2012, adjusted earnings were $1.49, down 32% from
the prior year. However, the full-year earnings beat the Zacks
Consensus Estimate of $1.40.
Net operating revenue in the quarter was up 13.4% year over year
at $419.5 million. However, reported revenues fell short of the
Zacks Consensus Estimate of $428.0 million.
Net operating revenue in 2012 was up 2.1% year over year at
's fourth quarter operating revenue increased 14.3% year over
year to $244.4 million as average daily sales volume rose nearly
Operating income dropped 31.5% year over year to $72.6 million.
segment, net gathering revenues surged 26.9% year over year to
$83.8 million, owing to 43% growth in gathered volumes. Net
transmission revenues increased 58.6%. Net storage, marketing and
other operating revenues averaged $7.7 million, representing an
$11.3 million decline.
Operating income jumped 32.5% year over year to $70.4 million in
the reported quarter.
's net operating revenue increased 0.5% year over year to $50.0
The segment generated an operating income of $24.8 million versus
the year-ago level of $22.1 million.
During the quarter, net operating expense surged 36.2% year over
year to $268.5 million.
The company's operating cash flow was $268.9 million during the
quarter, reflecting an increase of 10.3% year over year.
EQT's capital expenditure totaled $1,400 million in 2012, with
$992 million spent on EQT Production, $376 million on EQT
Midstream and $32 million on EQT Distribution.
Earlier, the company had estimated 2013 volume of 335 Bcfe, which
is 30% higher than the 2012 forecasted volumes.
EQT Corporation is an integrated energy company with an emphasis
on natural gas supply activities in the Appalachian area,
including production and gathering, natural gas distribution and
transmission and energy efficiency solutions, primarily in the
eastern and western coastal regions of the United States.
During the quarter, the company entered into an agreement with
Peoples Natural Gas - a regulated natural gas distribution
company managed by an affiliate of investment fund SteelRiver
Infrastructure Partners LP. to sell EQT's gas utility, Equitable
With an increasing reserve structure and stellar Marcellus
results (Marcellus sales volumes were up 85% year over year in
2012), we believe that the company exhibits industry-leading
organic growth momentum.
Moreover, management's continuous efforts to derive value by
monetizing midstream assets will likely accelerate exploration
and production growth. Recently, EQT also formed a master limited
partnership (MLP) −
EQT Midstream Partners, L.P.
) − that would own selective interstate pipeline assets.
The proceeds of the IPO will likely to be used to finance further
acceleration of EQT's Marcellus development. The MLP is
anticipated to focus on providing transmission and gathering
services to producers in the Marcellus Shale, including EQT
Production Company. This will help the company to focus on other
areas of the business.
Again, recently, the company sold its limited partner interest in
the MLP to own portions of the assets of Equitrans, L.P., EQT's
interstate pipeline subsidiary. Hence, EQT now owns the general
partner of the MLP that will in turn provide the company with
incentive distribution rights and a substantial portion of the
MLP's common units.
However, EQT lacks a geographically diversified asset base, as
its resources are concentrated in the Appalachian Basin. Any
potential disruption in the region will adversely affect the
The company holds a Zacks Rank #3, which translates to a
short-term Hold rating. However, there are other stocks -
Clean Energy Fuels Corp.
) - in the oil and gas sector that are expected to perform well
in the coming one to three months. Both companies carry a Zacks
Rank #2 (Buy).
CLEAN EGY FUELS (CLNE): Free Stock Analysis
EQT MIDSTRM PTR (EQM): Free Stock Analysis
EQT CORP (EQT): Free Stock Analysis Report
UGI CORP (UGI): Free Stock Analysis Report
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