Coterra Energy Inc. CTRA reported third-quarter 2024 adjusted earnings per share of 30 cents, which missed the Zacks Consensus Estimate of 35 cents. The bottom line also declined from the year-ago quarter’s 47 cents. The year-over-year underperformance was due to weaker oil and natural gas realizations and a 10.2% increase in operating expenses.
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This oil and gas exploration and production firm’s operating revenues of $1.4 billion missed the Zacks Consensus Estimate by $11 million. However, the figure increased 0.2% from the year-ago level, driven by a higher year-over-year contribution from derivative instruments.
Coterra Energy Inc. Price, Consensus and EPS Surprise
Coterra Energy Inc. price-consensus-eps-surprise-chart | Coterra Energy Inc. Quote
Coterra Energy's board of directors approved a quarterly base dividend of 21 cents per share, payable on Nov. 27, 2024, to its shareholders of record as of Aug. 4.
In the quarter, the company repurchased 4.3 million shares for a total of $111 million at an average price of about $25.15 per share. As of Sept. 30, 2024, $1.2 billion remains under its $2 billion share repurchase authorization.
In the quarter, total shareholder returns reached $265 million, including $154 million in declared dividends and $111 million in share repurchases. The company has repurchased 15 million shares for a total of $401 million year to date.
Coterra Energy expects to return 50% or more of its annual free cash flow (non-GAAP) to the company’s shareholders through its 84 cents per share annual dividend and share repurchases. CTRA has returned 100% of the company’s free cash flow (non-GAAP) to its shareholders year to date.
CTRA’s Production & Price Realizations
The average third-quarter daily production decreased 0.2% from the year-ago level to 670.3 thousand barrels of oil equivalent (Mboe). The figure surpassed the Zacks Consensus Estimate of 642 Mboe.
The daily production of natural gas decreased 7.6% year over year to 2,682 million cubic feet (Mmcf) per day. Oil production rose 22.2% to 112.2 thousand barrels (MBbl) per day and natural gas liquids (NGL) production increased 16.1% to 109.7 MBbl perday in the quarter under review.
The average sales price for crude oil was $73.96 per barrel, indicating an 8.5% decrease from the prior-year level of $80.84.However, the figure was in line with the consensus mark.
The average realized natural gas price was $1.41 per thousand cubic feet compared with $2.01 in the year-earlier period. The figure was lower than the consensus estimate of $1.42 per thousand cubic feet.
The average realized NGL was $18.42 per thousand cubic feet compared with $16.67 in the year-earlier period. The figure was lower than the consensus estimate of $18.56 per thousand cubic feet.
CTRA’s Costs & Expenses
In the quarter under discussion, the average unit cost rose to $16.96 per barrel of oil equivalent from the previous year's $15.15. This improvement was due to Coterra's depreciation, depletion and amortization expenses, which increased 13.3% year over year on a per-barrel basis. Additionally, total operating expenses of $1035 million increased from the year-ago quarter’s $939 million.
CTRA’s Financial Position
Cash flow from operations went down 0.4% to $755 million, while CTRA’s cash capital expenditure for drilling and development totaled $393 million. The company’s free cash flow for the quarter amounted to $277 million.
As of Sept. 30, 2024, the company had $843 million in cash and cash equivalents. Coterra Energy had a long-term debt (including the current portion) of $2.1 billion as of the same date, indicating a debt-to-capitalization of 13.7%.
CTRA’s Guidance
Coterra Energy expects its capital expenditure budget between $1.75 billion and $1.85 billion for 2024. The company expects a discretionary cash flow (non-GAAP) of approximately $2.9 billion and a free cash flow (non-GAAP) of approximately $1.1 billion.
CTRA expects total equivalent production in the range of 660-690 thousand barrels of oil equivalent per day, oil production in the band of 107-108 thousand barrels of oil per day (MBopd), natural gas production in the range of 2,735-2,775 Mmcf per day and capital expenditures in the band of $410-$500 million for the fourth quarter of 2024.
CTRA currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Energy Earnings So Far
While it is early in the earnings season, there have been a few key energy releases so far. Let us glance through a couple of them.
Liberty Energy LBRT, the Denver-CO-based oil and gas equipment company, announced an adjusted net income of 45 cents per share, which missed the Zacks Consensus Estimate of 55 cents. This was primarily due to poor equipment and services execution and lower activity in the reported quarter. Additionally, the bottom line declined from the year-ago quarter’s reported figure of 86 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, LBRT’s board of directors announced a dividend of 8 cents per common share payable on Dec. 20, to its stockholders of record as of Dec. 6. This dividend represents a 14% increase from the prior regular quarterly dividend of 7 cents per share. In the quarter, Liberty returned $51 million to its shareholders through a combination of share repurchases and cash dividends.
Energy infrastructure provider, Kinder Morgan, Inc. KMI reported third-quarter adjusted earnings per share of 25 cents, which missed the Zacks Consensus Estimate of 27 cents. The bottom line was flat year over year. The weakness in quarterly results was caused by lower contributions from the Products Pipelines and CO2 business segments.
KMI also announced a quarterly cash dividend of 28.75 cents per share for the third quarter of 2024 (annualized dividend of $1.15), implying a 2% increase from the third-quarter 2023 level. The dividend is payable on Nov. 15, 2024, to its shareholders of record as of Oct. 31.
Schlumberger Limited SLB, a Houston, TX-based oil and gas equipment and services provider announced third-quarter earnings of 89 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 88 cents. The bottom line also increased from the year-ago quarter’s 78 cents. The strong quarterly earnings were primarily driven by broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions and contributions from long-cycle deepwater and gas projects played significant roles.
SLB reported a free cash flow of $1.81 billion in the third quarter. As of Sept. 30, the company had approximately $4.46 billion in cash and short-term investments. At the end of the quarter, it registered a long-term debt of $11.86 billion.
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Coterra Energy Inc. (CTRA) : Free Stock Analysis Report
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