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ConocoPhillips (COP) Down 8.9% Since Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for ConocoPhillipsCOP . Shares have lost about 8.9% in that time frame, underperforming the market.

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

ConocoPhillips reported fourth-quarter 2017 adjusted earnings of 45 cents per share, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company had posted a loss of 26 cents.

Revenues of $8,736 million beat the Zacks Consensus Estimate of $7,698 million and improved from $7,254 million in the year-ago quarter.

The fourth-quarter results were supported by higher oil and natural gas price realizations.

Hike in Dividend & Share Repurchases

ConocoPhillips got an approval from the board of directors to hike the quarterly dividend to 28.5 cents per share from 26.5 cents, representing an increase of 7.5%. The new dividend will likely be paid on Mar 1 to stockholders of record as of Feb 12.

The company also enhanced its share buyback program. With this, ConocoPhillips will increase share repurchases during 2018 to $2 billion from the prior projection of $1.5 billion.

Exploration and Production

Production from continuing operations averaged 1,256 thousand barrels of oil equivalent per day (MBOED) in the quarter, lower than 1,596 MBOED in the year-ago quarter. The decline was led by planned divestment of assets.

Price Realization

Average realized price for oil was $58.99 a barrel, up from $47.05 in the year-earlier quarter. Natural gas liquids were sold at $32.79 a barrel, up from $21.82 in the year-ago quarter. The price of natural gas was $4.59 per thousand cubic feet, compared with $3.44 in fourth-quarter 2016.

Financials

As of Dec 31, 2017, the company had total cash and cash equivalents of $6.3 billion and debt of $19.7 billion, with a debt-to-capitalization ratio of 39%. In the reported quarter, ConocoPhillips generated $2.5 billion in cash from operating activities. Capital expenditures and investments totaled $1.5 billion and dividends payments grossed $319 million.

Total Expenses

The company reported expenses of $7.4 billion in the fourth quarter, compared with $7.3 billion in the October-December quarter of 2016.

Proved Reserves

The company's initial estimate for 2017 proved reserves of oil and natural gas stands at 5 billion barrels of oil equivalent.

How Have Estimates Been Moving Since Then?

Fresh estimate followed a flat path over the past two months.

ConocoPhillips Price and Consensus

ConocoPhillips Price and Consensus | ConocoPhillips Quote

VGM Scores

Currently, COP has a nice Growth Score of B, a grade with the same score on the momentum front. However, 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.

Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.

Outlook

COP has a Zacks Rank #1 (Strong Buy). We expect an above average 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.


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

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