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Key Takeaways from Denbury Resources’ 2Q17 Earnings

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Key Takeaways from Denbury Resources’ 2Q17 Earnings PART 1 OF 6

Denbury Resources’ Profit Fell 97% Year-over-Year in 2Q17

2Q17 adjusted net income

Denbury Resources (DNR) announced its 2Q17 earnings on August 8, 2017, before the market opened. Denbury Resources reported a better-than-expected profit of ~$1 million in 2Q17. Wall Street analysts were expecting a loss of ~$5 million.

On a year-over-year basis, DNR’s profit fell ~97%. In 2Q16, DNR reported a profit of $29 million. However, on a sequential basis and excluding any one-time items, DNR turned its losses into profits. DNR reported a loss of ~$7 million in 1Q17.

Denbury Resources’ Profit Fell 97% Year-over-Year in 2Q17

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2Q17 reported net income

Denbury Resources’ (DNR) 2Q17 adjusted net income excludes its one-time benefits and charges totaling ~$13 million. The majority of these one-time items are related to the non-cash gain on commodity derivatives and charges related to income tax adjustments.

Including these one-time items, DNR’s reported net income on a GAAP1 basis is higher at ~$14 million, or $0.04 per share, in 2Q17 than its reading of about -$381 million, or -$1.03 per share, in 2Q16.

1Q17 adjusted net income

In 1Q17, DNR reported a worse-than-expected loss of ~$7 million when compared with Wall Street analysts’ expectations for a loss of ~$4 million. However, DNR’s net income in 1Q17 was much better than the loss of $9 million in 1Q16.

On a year-over-year basis, DNR cut its losses by ~22%. However, on a sequential basis and excluding any one-time items, DNR’s losses rose ~8% in 1Q17 from a loss of ~$6 million in 4Q16.

Peers

DNR’s peers Cobalt International Energy (CIE) and Southwestern Energy (SWN) reported adjusted net incomes of about -$71 million and ~$40 million, respectively, in 2Q17. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) generally invests at least 80.0% of its total assets in oil and gas exploration companies.

In this series…

Having analyzed Denbury Resources’ 2Q17 net income, in the course of this series, we will also look at Denbury Resources’ revenues, production, cash flows, and Wall Street analyst ratings.

  1. generally accepted accounting principles
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