Hess (HES) Beats on Q1 Earnings, Bumps Up Share Buyback
Hess Corporation HES reported adjusted first-quarter 2018 loss from continuing operations of 27 cents per share, narrower than the Zacks Consensus Estimate of a loss of 54 cents and the year-ago quarter loss of $1.07.
Revenues increased to $1,390 million in the quarter from $1,254 million a year ago. The top line also surpassed the Zacks Consensus Estimate of $1,150 million.
Higher realized oil and natural gas prices, rise in throughput volumes and the plunge in operating expenses supported the first-quarter numbers. The results were however partially offset by lower oil equivalent production.
Through first-quarter 2018, Hess spent roughly $380 million for buying back 8 million shares. The energy player also announced that it has boosted the buyback program to $1.5 billion, reflecting an increase of $1 billion.
Q1 Operational Update
Exploration and Production:In the quarter under review, the Exploration and Production business incurred a loss of $25 million, way narrower than the year-earlier loss of $233 million.
Quarterly hydrocarbon production was 255 thousand barrels of oil equivalent per day, down 18% year over year owing to unscheduled downtime at Gulf of Mexico’s Enchilada platform.
Crude oil production was 131 thousand barrels per day compared with 175 thousand barrels in the year-ago quarter. Natural gas liquids production totaled 37 thousand barrels per day compared with 40 thousand barrels in the prior-year quarter. Natural gas output was 504 thousand cubic feet (Mcf) per day versus 484 Mcf a year ago.
Worldwide crude oil realization per barrel of $59.32 (including the impact of hedging) showed an increase of 22% year over year.
Worldwide natural gas prices rose 20.6% year over year to $3.86 per Mcf. The average worldwide natural gas liquids selling price also increased to $21.11 per barrel from $18.71 in the year-ago quarter.
Midstream: From this business, the company generated profits of $28 million, significantly higher than $18 million in the January-to-March quarter of 2017. Rise in throughput volumes primarily contributed to the segment’s profits.
Operating expenses in the first quarter totaled $288 million, down more than 19% from the year-ago $358 million.
Quarterly net cash flow from operations was $210 million at the end of the first quarter. Hess’ capital and exploratory expenditures totaled $384 million, down 2.3% from $393 million in the prior-year quarter.
As of Mar 31, 2018, the company had approximately $3,726 million in cash and $6,397 million in long-term debt. The debt-to-capitalization ratio at the end of the quarter was 35.5%.
Q1 Price Performance
The pricing chart reveals that the company outperformed the industry in the January-to-March 2018 quarter. During this period, the company’s shares gained 6.6% against the industry’s 1.4% decline.
Zacks Rank & Stocks to Consider
Hess carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy space are Mammoth Energy Services, Inc. TUSK, Baytex Energy Corp. BTE and Flotek Industries, Inc. FTK. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Mammoth Energy is expected to witness a year-over-year rise of 246.5% in 2018 earnings.
Baytex managed to beat the Zacks Consensus Estimate in each of the last three quarters.
Flotek Industries is expected to see year-over-year earnings growth of 557.1% in 2018.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Baytex Energy Corp (BTE): Free Stock Analysis Report
Flotek Industries, Inc. (FTK): Free Stock Analysis Report
Hess Corporation (HES): Free Stock Analysis Report
MAMMOOTH ENERGY (TUSK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research