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Why Is Newfield Exploration (NFX) Down 9.1% Since its Last Earnings Report?


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It has been about a month since the last earnings report for Newfield Exploration Company NFX . Shares have lost about 9.1% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is NFX 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.

Fourth-Quarter 2017 Results

Newfield Exploration Company's reported adjusted fourth-quarter 2017 earnings of 71 cents per share that beat the Zacks Consensus Estimate of 60 cents. The bottom line also improved from the year-ago quarter's 49 cents.

Total revenues improved from $415 million in the year-ago quarter to $509 million, beating the Zacks Consensus Estimate of $501 million.

Considerable production from the Anadarko Basin and higher realized oil and gas equivalent prices drove fourth-quarter results.

Operational Performance

During the quarter, total production totaled 15.6 million barrels of oil equivalent (MMBoe). This was higher than 13.9 MMBoe recorded in the year-ago quarter. Significantly high oil and natural gas equivalent volumes from the Anadarko Basin supported the outperformance.  

Natural gas volumes totaled 36.6 billion cubic feet. Oil, condensate and NGLs volumes were 9.5 million barrels.

Newfield Exploration's fourth-quarter oil and natural gas price realizations averaged $32.29 per barrel of oil equivalent as against $31.27 per barrel in the year-ago quarter.  

Natural gas prices were $2.58 per thousand cubic feet, oil prices were $49.60 per barrel and NGLs prices were $30.15 per barrel.  

Financials

At the end of the fourth quarter, Newfield Exploration had cash balance of $326 million. Long-term debt was $2,434 million, which represents a debt-to-capitalization ratio of approximately 63.4%.

Proved Reserves Grow

The company recorded total proved reserves of 680 MMBoe as of Dec 31, 2017. This marked an improvement of almost 33% from the year-ago 513 MMBoe.

Outlook

For 2018, Newfield Exploration projects capital expenditure of $1,300 million, higher than $1,153 million spending through 2017. Through 2020, the company will likely invest $4.2 billion of capital.

The upstream energy player expects 2018 production between 170 and 183 thousand barrels of oil equivalent per day (MBoe/D). Over the three-year period, Newfield Exploration expects annual production growth between 14% and 18%.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. There have been four revisions higher for the current quarter compared to two lower.

Newfield Exploration Company Price and Consensus

Newfield Exploration Company Price and Consensus | Newfield Exploration Company Quote

VGM Scores

At this time, NFX has an average Growth Score of C, a grade with the same score on the momentum front. 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.

Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.

Outlook

Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Interestingly, NFX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Earnings




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