Coterra Energy (CTRA) Q1 Earnings and Revenues Beat Estimates
Coterra Energy Inc. CTRA reported first-quarter 2024 adjusted earnings per share of 51 cents, which beat the Zacks Consensus Estimate of 41 cents. The outperformance reflects strong production. However, the bottom line declined from the year-ago quarter’s level of 87 cents. The year-over-year underperformance was primarily due to weaker natural gas and natural gas liquids realizations.
This oil and gas exploration and production firm’s operating revenues of $1.4 billion beat the Zacks Consensus Estimate by $50 million. However, the figure fell 19.4 % from the year-ago level of $ 1.8 billion.
Coterra Energy's board of directors approved a quarterly base dividend of 21 cents per share, payable on May 30, 2024, to shareholders of record as of May 16, 2024.
Throughout the quarter, the company bought back 5.6 million shares for $150 million (excluding a 1% excise tax paid in cash), with an average price per share of about $26.94. This left $1.4 billion of its $2.0 billion share repurchase authorization still available as of Mar 31, 2024.
In the quarter, total shareholder returns reached $307 million, with $157 million in declared dividends and $150 million in share repurchases (excluding 1% excise tax, paid in cash).
Coterra Energy remains dedicated to returning 50% or more of its annual free cash flow (non-GAAP) to shareholders through $0.84 per share annual dividend and share repurchases.
Coterra Energy Inc. Price, Consensus and EPS Surprise
Coterra Energy Inc. price-consensus-eps-surprise-chart | Coterra Energy Inc. Quote
Production & Price Realizations
The average first-quarter daily production increased 8% from the year-ago level to 686.1 thousand barrels of oil equivalent (Mboe). The figure also surpassed the Zacks Consensus Estimate of 678 Mboe.
The daily production of natural gas increased 7.4% year over year to 2,960 Mmcf/day. Oil production rose 11.2% to 102.5 MBbl/day, and natural gas liquids (NGL) production increased 8.2% to 90.2 MBbl/day during the same time frame.
The average sales price for crude during the first quarter was $75.16 per barrel, indicating a 1.5% increase from the prior-year level of $74.03. The figure was also higher than the consensus mark of $74 per barrel.
The average realized natural gas price was $2.20 per thousand cubic feet compared with $3.71 in the year-earlier period. The figure was also higher than the consensus estimate of $1.99 per thousand cubic feet.
The average realized NGL was $21.09 per thousand cubic feet compared with $23.66 in the year-earlier period.
Costs & Expenses
In the quarter, the average unit cost marginally rose to $15.94 per barrel of oil equivalent (boe) from the previous year's $15.91. This increase was primarily due to Coterra's depreciation expenses, which increased by 7.3% year over year on a per-barrel basis.
Financial Position
Cash flow from operations went down 42.7% to $856 million, while CTRA’s cash capital expenditure for drilling and development totaled $457 million. The company’s free cash flow for the quarter amounted to $340 million.
As of Mar 31, 2024, the company had $1.3 billion 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, reflecting a debt-to-capitalization of 13.7%.
Guidance
Coterra Energy expects its budgeted capital spending to be between $1.75 billion and $1.95 billion for 2024.
The company expects total equivalent production in the range of 625-655 thousand barrels of oil equivalent per day (MBoepd), oil production in the band of 102-107 thousand barrels of oil per day (MBopd), natural gas production in the 2,600-2,700 million cubic feet per day (MMcfpd) range, and capital expenditures in the band of $470 -$550 million for the second quarter of 2024. It projects a discretionary cash flow (non-GAAP) of $3.1 billion and a free cash flow (non-GAAP) of $1.3 billion for 2024.
Important Energy Earnings so far
While we have discussed Coterra Energy’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
EOG Resources, Inc. EOG, an American energy company engaged in hydrocarbon exploration, announced first-quarter 2023 adjusted earnings per share of $2.82, which beat the Zacks Consensus Estimate of $2.70. The bottom line also increased from the year-ago quarter’s level of $2.69. Strong quarterly results were primarily driven by higher total production volumes.
Total quarterly revenues of $6.1 billion beat the Zacks Consensus Estimate of $5.9 billion. The top line also surpassed the prior-year quarter’s level of $6.04 billion. As of Mar 31, 2024, EOG had cash and cash equivalents worth $5.3 million and long-term debt of $3.8 billion.
SLB SLB, the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments, and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy VLO reported first-quarter 2024 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure surpassed our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. It was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.
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