It has been about a month since the last earnings report for Gulfport Energy (GPOR). Shares have added about 3.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Gulfport Energy 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 catalysts.
Second-Quarter 2018 Results
Gulfport Energy reported second-quarter adjusted net income per share of 33 cents, beating the Zacks Consensus Estimate of 28 cents. The better-than-expected performance was driven by higher-than-anticipated natural gas output, especially from the Utica shale. Natural gas volumes in the quarter under review totaled 108.2 billion cubic feet of gas (Bcf), surpassing the Zacks Consensus Estimate of $105.3 Bcf.
The bottom line, however, remained unchanged from the prior-year level on increasing costs.
Revenues of $252.7 million missed the Zacks Consensus Estimate of $329 million. The top line also deteriorated from the year-ago figure of $323.9 million on lower natural gas realizations.
Production & Prices
Gulfport's total oil and gas production increased 28.1% to 1,330.3 million cubic feet equivalent per day (MMcfe/d) from last year's corresponding period. Of the total output, 89% comprised natural gas. Natural gas liquids and oil constituted 7% and 4% of the total production, respectively.
The company witnessed improved year-over-year production from Utica and SCOOP plays in the quarter. Output from Utica and SCOOP totaled 96,994 MMcfe and 22,500 MMcfe, respectively, in the second quarter of 2018. Nearly 80.1% of the company's output came from the Utica acreage.
Average realized natural gas oil price (before the impact of derivatives) during the second quarter was $2.15 per Mcf, representing a decline of 13.3% from the year-ago realization of $2.48. However, average realized natural gas liquids price was 71 cents per gallon, up 57.8% from the year-ago period. Gulfport fetched $66.26 per barrel of oil during the quarter, up 46.2% year over year.
Total expenses in the quarter under review amounted to $238.9 million, reflecting a 32.2% increase from the second quarter of 2017. This is mainly attributed to increased depreciation and midstream gathering/processing charges incurred in the reported quarter.
While depreciation costs rose 48.2% to stand at $121.9 million, midstream gathering/processing expenses scaled up 21.2% to $71.4 million.
Capex, Balance Sheet & Stock Buyback
In the reported quarter, Gulfport spent $235.6 million on drilling and completion, as well as capital expenditure. As of Jun 30, 2018, the natural gas-weighted energy explorer had approximately $119.2 million in cash and cash equivalents. Gulfport Energy had long-term debt of $2,114 million, representing a debt-to-capitalization ratio of around 40%.
Year-to-date, Gulfport repurchased 10.5 million shares at an average price of $10.47, with total share buyback worth around $110 million.
While the company reiterated its full-year 2018 capital expenditure guidance, it upgraded the output forecast.
Gulfport expects 2018 drilling and completion capex in the band of $630-$685 million. The company now anticipates its output between 1,320 MMcfe/d and 1,340 MMcfe/d versus prior guided range of 1,310-1,340 MMcfe/d. The current forecast reflects a 21-23% increase from the 2017 production level of $1,089.2 MMcfe/d.
For the third quarter, Gulfport's output is estimated at around 1,360 MMcfe/d.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.43% due to these changes.
At this time, Gulfport Energy has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Gulfport Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.