Why Is Denbury Resources (DNR) Down 25.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Denbury Resources (DNR). Shares have lost about 25.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Denbury Resources due for a breakout? 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.
Denbury Q3 Earnings Beats Estimates, Rises Y/Y
Denbury Resources Inc.'s third-quarter 2018 earnings per share (EPS) of 13 cents (excluding one-time items) beat the Zacks Consensus Estimate of 11 cents and improved from the year-ago quarter's earnings of 4 cents.
Total revenues of $395 million rose from $266.5 million in the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $357 million.
Higher realized crude price attributed to the strong quarterly results.
During the quarter, production averaged 59,181 barrels of oil equivalent per day (Boe/d) compared with 60,328 Boe/d in the prior-year quarter.
Oil production averaged 57,410 barrels per day (bpd) (approximately 97% of the total volume), down from the year-ago quarter's level of 58,376 bpd. Natural gas production averaged 10,623 thousand cubic feet/Mcf (down 9.3%) on a daily basis.
The company's production from tertiary operations averaged 37,219 barrels per day, down 2.9% year over year.
Oil price realization (including the impact of hedges) averaged $59.78 per barrel in the quarter, up 25.1% year over year. Gas prices fell 4.9% year over year to $2.35 per Mcf. On an oil equivalent basis, the overall price realization was $58.41 per barrel, up 25.1% from the year-earlier quarter's level of $46.69 per barrel.
Adjusted cash flow from operations was $135 million in the reported quarter compared with $68 million in the year-ago quarter. The company's capital spending rose to $95.6 million from the year-earlier quarter's figure of $67.3 million. As of Sep 30, 2018, cash balance was $66.7 million and total debt was $2.5 billion.
Denbury continues to expect 2018 production in the range of 60,000-64,000 Boe/d. The company reiterated its capital expenditure in the range of $300 million-$325 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted -13.33% due to these changes.
At this time, Denbury Resources has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, 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.
Denbury Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.