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A Post-Earnings Analysis of Hess Corporation's 4Q16

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A Post-Earnings Analysis of Hess Corporation's 4Q16 PART 1 OF 6

How Did Hess’s 4Q16 Earnings and Revenue Perform?

Hess’s 4Q16 revenue

Hess Corporation (HES) reported its 4Q16 earnings on January 25, 2017. Its 4Q16 revenue was ~$1.4 billion, higher than analysts’ consensus estimate of $1 billion and similar to its level in 4Q15. HES’s revenue in 3Q16 was ~$1.2 billion.

How Did Hess’s 4Q16 Earnings and Revenue Perform?

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Hess’s 4Q16 earnings

Hess reported adjusted net income of -$305 million in 4Q16. Its adjusted net income was -$396 million in 4Q15 and -$340 million in 3Q16. The company reported adjusted EPS (earnings per share) of -$1.01 in 4Q16, slightly better than analysts’ consensus estimate of -$1.08.

In the image above, we can see that Hess’s earnings and revenue performed better than analysts had expected in 4Q16. Hess’s 4Q16 earnings release noted, “The adjusted fourth quarter 2016 results reflect higher realized crude oil selling prices and improved total production unit costs.”

Hess’s revenue for 2016 came in at $4.8 billion, higher than analysts’ consensus estimate of $4.6 billion. Its revenue in 2015 was ~$6.6 billion. Its adjusted net income for 2016 was ~-$1.5 billion, compared to its adjusted net income of -$1.1 billion in 2015.

Peer comparison

Hess’s peers Apache (APA) and Continental Resources (CLR) haven’t announced their 4Q16 earnings yet. Analysts expect these companies’ EPS to come in at ~$0.10 and $0.55, respectively. Keep checking in with Market Realist for earnings coverage on these companies.

Proved reserves

The company’s proved reserves at the end of 2016 were 1.1 billion barrels of oil equivalent, compared to 1.08 billion barrels of oil equivalent at the end of 2015.

According to Hess, its growth opportunities lie in the Bakken and Utica plays. It also has several offshore growth projects, including its North Malay Basin and Stampede projects.

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