EQT Corp (EQT) Reports Narrower-than-Expected Q2 Loss

Integrated energy player EQT Corporation EQT posted second-quarter 2016 adjusted loss per share of 35 cents, substantially narrower than the Zacks Consensus Estimate of a loss of 46 cents. The company had recorded earnings of 1 cent per share in the year-earlier quarter.

Net operating revenue in the quarter came in at $127.5 million. The top line not only missed the Zacks Consensus Estimate of $436.0 million but also decreased from $439.6 million in the year-ago quarter.

Segment Details

EQT Production's second-quarter operating revenues were $72 million, significantly lower than $316.8 million in the year-ago quarter. However, the company clocked sales volume of 184.5 billion cubic feet equivalent (Bcfe) in the second quarter, up 25.5% year over year.

Operating loss for the second quarter was $444.0 million. The company had incurred an operating loss of $66.9 million in the year-ago period.

Under the EQT Midstream segment, net gathering revenue increased 10.6% year over year to $136.4 million on 19% growth in gathered volumes. Net transmission revenue grew 14%.

EQT CORP Price, Consensus and EPS Surprise

EQT CORP Price, Consensus and EPS Surprise | EQT CORP Quote

Operating income jumped 15% year over year to $124.5 million in the reported quarter.
 
Cash Flow

The company's adjusted operating cash flow was $113.8 million compared with $146.5 million in the year-ago quarter.

Wells Drilled

The company spud 28 gross wells during the second quarter. Of the total, the company drilled 37 wells in the Marcellus with an average length-of-pay of 6,400 feet and one was drilled in the Upper Devonian with an average length-of-pay of 5,200 feet.

Guidance

Production sales volume for 2016 is projected in the range of 730–740 Bcfe. Liquids volume is expected at 11,000–11,500 thousand barrel of oil equivalent (MBBl). Of this, third-quarter volume is estimated at 183–187 Bcfe, with liquids of 3,050–3,100 MBBls. The company estimates full-year earnings before interest, taxes, depreciation, and amortization or EBITDA between $1,210 million and $1,240 million.

Zacks Rank

EQT currently holds a Zacks Rank #2 (Buy). Other favorably placed players from the energy sector are Sasol Ltd SSL, Dril-Quip, Inc. DRQ and Murphy USA Inc MUSA. Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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