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How Whiting Petroleum Stock Reacted to 3Q17 Earnings Beat

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How Whiting Petroleum Stock Reacted to 3Q17 Earnings Beat PART 1 OF 5

How Whiting’s 3Q Revenue and Earnings Measured Up to Expectations

Whiting’s 3Q17 revenue in line with estimates

Whiting Petroleum (WLL) held its 3Q17 earnings conference on October 26, 2017. The company released its 3Q17 earnings on October 25 after markets closed. WLL reported revenue of $324.2 million versus the estimate of ~$328.5 million. In the corresponding quarter last year, WLL had reported revenue of $129.3 million.

How Whiting’s 3Q Revenue and Earnings Measured Up to Expectations

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As we can see in the graph above, WLL’s 3Q17 revenue was higher on a year-over-year basis. However, the revenue in 3Q16 included a one-time loss on the sale of properties of $189 million. In the absence of this, WLL’s revenue in 3Q16 would have been ~$318 million. As we can see, this was still lower compared to 3Q17 revenue. The higher revenues in 3Q17 were the result of higher crude oil prices (UCO) (DBO). Crude oil prices were averaging $48.15 per barrel in 3Q17 compared to $45.04 in 3Q16.

Compared to 2Q17, revenue in 3Q17 was again higher, albeit less significantly on a year-over-year basis due to higher production volumes in 3Q17 versus 2Q17. We’ll talk more about WLL’s 3Q17 production in the following part of the series.

Whiting’s 3Q17 earnings were better than estimates

In 3Q17, Whiting reported adjusted EPS (earnings per share) of -$0.14 compared to Wall Street analysts’ estimate of -$0.2. In 3Q16, WLL had reported adjusted EPS of -$0.47, and in 2Q17, it had reported adjusted EPS of -$0.18. As we can see, 3Q17 earnings were again higher both on a year-over-year as well as on a sequential basis on account of higher revenues as we saw above. Lower operating expenses in 3Q17 also supported higher earnings. Depreciation, depletion, and amortization expenses in 3Q17 were $212.8 million compared to $284.6 million in 3Q16. General and administrative (or G&A) expenses in 3Q17 were $30 million compared to $33.9 million in 3Q16.

Next, we’ll look at WLL’s operational performance in 3Q17.

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