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Were Hess’s 2Q16 Earnings and Revenue Beat Expectations

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Hess’s 2Q16 revenue

Hess (HES) reported its 2Q16 earnings on July 27. Its 2Q16 revenue was $1.27 billion versus an estimate of $1.12 billion. Revenue in 2Q15 was ~$1.93 billion. In 1Q16 it was $993 million.

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Hess’s 2Q16 earnings

Hess reported an adjusted net loss of $335 million in 2Q16. Adjusted net loss in the corresponding period in 2015 was $147 million. In 1Q16, Hess reported an adjusted net loss of $569 million.

Hess’s 2Q16 earnings release noted, “Lower production and realized selling prices reduced second quarter 2016 after-tax results by approximately $365 million compared to the second quarter of 2015.”

The company reported adjusted EPS (earnings per share) of -$1.1. Wall Street analysts’ consensus estimate for EPS was -$1.24.

As you can see in the graph above, Hess’s earnings and revenues came in better than expected.

Peer comparison

Peers Apache (APA) and Continental Resources (CLR) haven’t announced their 2Q16 earnings yet. Analysts expect the EPS for these companies to come in at about -$0.17 each. Watch this space for earnings coverage on these companies.

The above companies make up ~8% of the iShares U.S. Oil & Gas Exploration & Production ETF (IEO).

Key management comments

CEO John Hess noted in the 2Q16 earnings release, “We remain confident in our ability to manage through the current environment and deliver strong production and cash flow growth as oil prices recover.”

On the company’s assets, Hess said, “Our resilient portfolio provides an attractive mix of growth options including an unparalleled position in the Bakken, two significant offshore developments that will come online in 2017 and 2018, and the recent world-class oil discovery in Guyana.”

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