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W&T Offshore Expected to Reduce Net Losses in 4Q16



Earnings per share estimates

W&T Offshore (WTI) is set to report its 4Q16 and fiscal 2016 earnings on March 1, 2017, after the market closes. For 4Q16, excluding one-time items, the current consensus EPS (earnings per share) estimate for W&T Offshore is -$0.13. W&T Offshore is expected to cut its losses by more than 48% in 4Q16 from the adjusted EPS of -$0.44 in 4Q15.

On a sequential basis and excluding one-time items, W&T Offshore’s 4Q16 current EPS estimate indicates ~26% lower losses than the adjusted EPS of -$0.24 in 3Q16.

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W&T Offshore’s net income in 3Q16

Although W&T Offshore reported negative income in 3Q16, it was higher than in 3Q15. Correspondingly, W&T Offshore’s adjusted EPS were higher in 3Q16, at -$0.24, compared with -$0.82 in 3Q15.

W&T Offshore’s 3Q16 adjusted net income excludes one-time charges and benefits of ~$68 million. Most of that total was related to the impairments of natural gas and oil properties, tax-related adjustments, and a gain on exchange of debt. Including these one-time items, W&T Offshore’s net GAAP (generally accepted accounting principles) income was $46 million ($0.48 per share) in 3Q16, compared with -$478 million (-$6.29 per share) in 3Q15.

Peers Diamondback Energy (FANG) and EOG Resources (EOG) reported net income of approximately -$2.2 million (-$0.03 per share) and -$190 million (-$0.35 per share), respectively, in 3Q16.

Fiscal 2016 EPS estimates

In fiscal 2016, excluding one-time items, Wall Street analysts expect W&T Offshore to report adjusted net income of approximately -$141 million, compared with -$223 million in 2015. Excluding one-time items, Wall Street analysts expect W&T Offshore to report EPS of -$1.86 in 2016, compared with -$2.94 in 2015. In the next part, we’ll take a look at W&T Offshore’s revenue estimates.


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