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Analyzing EOG Resources’ 1Q16 Earnings Performance

Nicholas Chapman

EOG Resources Beats 1Q16 Estimates: How Did Its Stock React?

EOG Resources’ 1Q16 earnings beat estimates

EOG Resources (EOG) announced its 1Q16 earnings on May 5, 2016, after the market closed. EOG reported an adjusted loss of $0.83 per share, $0.01 better than the Wall Street analyst consensus for a loss of $0.84 per share. EOG Resources’ 1Q16 earnings are $0.86 per share lower than the 1Q15 profit of $0.03 per share. Even when compared sequentially with 4Q15, EOG Resources’ 1Q16 earnings are lower by $0.56 per share.

EOG Resources’ 1Q16 revenues miss estimates

For 1Q16, EOG reported adjusted revenues of ~$1.4 billion, ~16% lower than Wall Street analyst consensus for revenues of ~$1.6 billion. EOG Resources’ 1Q16 revenues are ~48% lower than the 1Q15 revenues of ~$2.6 billion. Even when compared sequentially with 4Q15, EOG’s 1Q16 revenues are ~27% lower.

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EOG Resources’ earnings trend

As seen in the above chart, EOG Resources reported much lower earnings in 2015 due to lower realized crude oil (USO) (UWTI) (DWTI) and natural gas (UNG) (BOIL) prices. In 4Q15, EOG Resources saw its adjusted earnings turn negative for the first time since 2002. Since 1Q13, EOG Resources has beaten the earnings expectations ~92% of the time.

Due to the steep downward trend in energy prices, upstream companies Southwestern Energy (SWN) and Consol Energy (CNX) have reported ~37% and ~36% year-over-year declines in their 1Q16 adjusted revenues, respectively. However, Pioneer Natural Resources (PXD) has reported a ~21% year-over-year increase in its 4Q15 adjusted revenues. The Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3x Shares ETF (DRIP) is a leveraged inverse fund that invests in oil and gas exploration and production companies, whereas the First Trust ISE-Revere Natural Gas ETF (FCG) invests in natural gas producers.

In this series

In the course of this series, we’ll look at EOG’s operational performance, Wall Street analyst ratings, and how EOG Resources’ stock price has reacted to past earnings beats. Let’s take a look at EOG’s operational performance in 1Q16.

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