Quarterly revenues versus consensus
EOG Resources’s (EOG) 2Q15 revenues fell short of estimates. EOG’s 2Q15 adjusted revenue, at $2.52 billion, was 4% lower than the $2.63 billion that consensus sell-side analysts estimated.
On average, adjusted revenues have fallen short of consensus revenues by ~4% in the past 13 quarters. Between 2Q12 and 2Q15, EOG’s adjusted revenues have decreased 13%. They decreased even more sharply from 2Q14 to 2Q15—by 40%—as energy prices plummeted during this period.
Quarterly earnings per share versus consensus
EOG’s 2Q15 adjusted EPS (earnings per share) did, however, beat estimates significantly. EOG’s 2Q15 adjusted earnings are $0.28, 177% higher than the consensus sell-side analysts’ EPS estimate of $0.10. Adjusted earnings exclude various one-time charges, such as the derivatives contracts loss and impairment charges. EOG’s operating costs management efforts resulted in lower lease and well costs per Mmboe, which led to better-than-expected 2Q15 earnings.
Between 2Q12 and 2Q15, EOG’s adjusted EPS has decreased 52%. But more recently, the fall in crude oil prices has crushed earnings from upstream companies, affecting EOG even more severely, perhaps explaining the 81% decrease from 2Q14 to 2Q15.
Still, as the graph above shows, EOG’s adjusted EPS exceeded estimates in many previous quarters, averaging ~8% above consensus over the past 13 quarters.
Share price down on earnings
Immediately after EOG Resources released its financial information for 2Q15 on August 6, its stock reacted negatively. The following day, it decreased 5.0% to $73.76 from the previous day’s close. Since the beginning of this year, its share price has gone down 20%.
Pioneer Natural Resources Company (PXD), the Texas-based upstream energy company, has witnessed a 17% year-to-date share price decline. Continental Resources (CLR) has likewise seen a 15% share price decline since the beginning of the year. EOG Resources makes up 3.65% of the Energy Select Sector SPDR (XLE). XLE has fallen 16% during the same period. EOG also comprises 2.8% of the iShares US Energy (IYE).