Wider-than-Expected Loss at Quicksilver - Analyst Blog

Quicksilver Resources Inc. KWK posted an adjusted loss per share of 8 cents in the first quarter of 2014, wider than the Zacks Consensus Estimate of a loss of 6 cents and the year-ago loss of 4 cents per share.

On a GAAP basis, the loss was 34 cents per share considering the effect of an unrealized commodity derivatives loss, strategic transaction costs and income tax adjustments.

Total Revenue

Quicksilver Resources' total revenues were $91.8 million in the reported quarter, lagging the Zacks Consensus Estimate by 16.5%. On a year-over-year basis, quarterly revenues decreased nearly 22.7%. The revenue decline can be attributed to a 12.8% downside in production returns.

Operational Update

In first-quarter 2014, Quicksilver Resources achieved overall average daily production of 245.9 million cubic feet of natural gas equivalent (MMcfed), down 31.2% year over year due to lower natural gas, natural gas liquids NGL and oil production volumes.
 
Total realized prices (excluding hedging) surged 34.9% year over year to $4.79 per thousand cubic feet (Mcfe) in the reported quarter due to higher average realized prices of NGL, natural gas and oil.

Total expenses fell 16.1% year over year to $102.8 million due to a sharp 24.7% decline in lease operating expenses.

Quicksilver Resources incurred an operating loss of $11.1 million, wider than a loss of $3.9 million in the year-ago period. The steep revenue downturn outweighed the favorable cost decline resulting in the company to incur a loss in the first quarter 2014.

Financials

Quicksilver Resources' cash balance as of Mar 31, 2014, was $69.3 million versus $89.1 million as of Dec 31, 2013.

Long-term debt as of Mar 31, 2014, was nearly $1,986.4 million versus $1,988.9 million as of Dec 31, 2013.

Net cash used in operating activities during the quarter was $20.0 million versus $14.4 million in the year-ago comparable period.

Capital expenditure was $38.7 million, higher than the year-ago figure of $27.4 million.

Guidance

Quicksilver Resources maintained its capital investment guidance at $136 million for 2014. The company expects second quarter daily average production volume in the range of 255−260 MMcfe per day. Quicksilver Resources retained its full-year 2014 production volume guidance in the range of 245–255 MMcfe per day.

Other Company Releases

Clayton Williams Energy, Inc.'s CWEI adjusted earnings from continuing operations were 94 cents per share, exceeding the Zacks Consensus Estimate by 10.6%.

Ultra Petroleum Corp. UPL reported first-quarter adjusted earnings of 87 cents per share, beating the Zacks Consensus Estimate by 16%.

Rex Energy Corp. REXX reported first-quarter pro forma earnings per share of 20 cents, well above the Zacks Consensus Estimate of 15 cents.

Zacks Rank

Quicksilver Resources currently carries a Zacks Rank #3 (Hold).