Cabot Oil & Gas’s Earnings: 3Q15 EPS Missed Estimates



Cabot Oil & Gas’s 3Q15 EPS

On October 23, Cabot Oil & Gas (COG) announced earnings for 3Q15, ended September 30. The company announced an adjusted loss per share of $0.01, versus a consensus or Wall Street analysts’ estimate of $0.001 EPS, or earnings per share.

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Earnings analysis

Cabot Oil & Gas reported an adjusted net loss of $2.2 million in 3Q15 versus an adjusted net income of $85 million, or an EPS of $0.20, in 3Q14. Adjusted items included an after-tax non-cash mark-to-market loss on natural gas derivatives of $17.6 million.

In the previous quarter, the company had reported an adjusted net income of $14.6 million, or an EPS of $0.03.

The graph above notes that not only did Cabot Oil & Gas’s EPS miss estimates, but it also showed a loss for the first time since 2013.

Peer comparison

Southwestern Energy (SWN) announced earnings on October 22. It reported an adjusted EPS of $0.01 against a loss per share estimate of $0.03.

Other peers, including Antero Resources (AR) and Range Resources (RRC), are yet to announce their 3Q15 earnings. Analysts expect the respective earnings (or loss) per share for the two companies above to come in at $0.04 and ~$0.05, respectively.

All the above companies make up ~1.3% of the iShares North American Natural Resources ETF (IGE).

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What drove the company’s 3Q15 earnings?

According to its earnings release, the dismal performance in the third quarter was a result of lower realized prices for both natural gas and oil, as both were partially offset by higher production and lower operating expenses. We will be looking at Cabot Oil & Gas’s operational performance in a later part of this series.

The company’s stock

Cabot Oil & Gas’s stock closed at $21.1 following its 3Q15 earnings release, trading at its lowest levels since 2012. Since the beginning of this year, the stock fell ~30%.

Next, we’ll talk about the company’s 3Q15 revenue.


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