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Why Cabot Oil and Gas’s 4Q15 Loss Was Lower than Expected

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Cabot Oil and Gas’s 4Q15 revenue

Cabot Oil and Gas (COG) reported its 4Q15 earnings on February 19, 2016. The company announced adjusted revenue of ~$327 million. The consensus Wall Street estimate for revenue was ~$333 million. The 4Q15 revenue was ~48% lower than the 4Q14 revenue of $618 million.

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Cabot Oil and Gas’s 4Q15 earnings

COG’s 4Q15 adjusted loss per share was $0.02. The consensus Wall Street estimate was a ~$0.04 loss per share. In comparison, the 4Q14 earnings per share (or EPS) was $0.23. COG’s 4Q15 loss came in lower than expected on account of its hedges and lower operating costs. 4Q15 operating costs were $440.3 million, ~61% lower than 4Q14 operating costs of ~$1.1 billion.

COG’s peer Gulfport Energy (GPOR) had reported a 4Q15 adjusted net loss per share of $0.01 versus estimates of an ~$0.11 loss per share. Other peers such as Antero Resources (AR) and QEP Resources (QEP) are expected to report 4Q15 earnings per share of $0.14 and -$0.12, respectively. These companies make up ~1% of the Vanguard Energy ETF (VDE).

Cabot Oil and Gas’s 2015 earnings and revenue

For fiscal 2015, COG reported adjusted earnings per share of $0.13. The comparable earnings in 2014 were $0.97 per share. COG’s 2015 revenue came in at ~$1.5 billion. Comparable revenue in 2014 was ~$2.2 billion.

COG’s proved reserves

COG’s proved reserves at the end of 2015 were 8.2 trillion cubic feet equivalent, which was 11% higher than the company’s 2014 year-end proved reserves.

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