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Introducing Denbury’s Big Losses in 4Q16

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Updated

Adjusted net income

Denbury Resources (DNR) announced its 4Q16 earnings on February 23, 2017, before the market opened. Denbury reported a better-than-expected loss of ~$6.5 million, as Wall Street analysts were expecting an even bigger loss of ~$11.4 million.

On a YoY (year-over-year) basis, DNR’s losses rose more than 153% in 4Q16, as compared to its loss of ~$2.5 million in 4Q15. On a sequential basis, and excluding any one-time items, DNR turned to losses from a profit of ~$1.3 million in 3Q16.

For fiscal 2016, DNR reported lower adjusted net income of ~$14.4 million, or $0.04 per share, from ~$131 million, or $0.37 per share, in 2015.

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Reported net income

Denbury’s 4Q16 adjusted net income excludes the one-time benefits and charges totaling nearly -$379 million, the majority of which are related to the accelerated depreciation and income tax benefit. Including these one-time items, DNR’s net income on a GAAP (generally accepted accounting principles) basis is higher at about -$386 million, or roughly -$0.99 per share, in 4Q16, as compared to about -$885 million, or -$2.56 per share, in 4Q15.

For fiscal 2016, DNR reported higher net income on a GAAP basis of about -$976 million, or roughly $2.61 per share, from nearly -$4.4 billion, or about -$12.57 per share, in 2015. Peer Consol Energy (CNX) reported net income on GAAP basis of about -$848 million, or -$3.70 a share, in 2016.

Notably, the SPDR S&P Oil and Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies, whereas Energy Select Sector SPDR ETF (XLE) generally invests at least 95% of its total assets in oil and gas companies.

In this series

Now that we’re familiar with Denbury Resources’ 4Q16 and 2016 net income, in the subsequent parts of this series, we’ll continue to look at Denbury’s revenues, production, Wall Street analyst ratings, as well as DNR’s price forecast using implied volatility.

Keep reading for a closer look at Denbury’s revenues.

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