How Cabot Oil & Gas Stock Reacted to Its 2Q17 Earnings



Cabot Oil & Gas stock performance

Following Cabot Oil & Gas’s (COG) 2Q17 earnings release on July 28, 2017, COG stock rose 1.3% that same day. The stock has risen ~14.0% since the beginning of the year.

As you can see in the above graph, Cabot Oil & Gas’s performance has been mirroring natural gas (UNG) and crude oil prices. However, COG has had better returns than natural gas and crude oil since the beginning of the year. Crude oil prices have fallen 5.0% since the beginning of the year, while natural gas prices have fallen ~12.0% in the same period.

Natural gas prices and crude oil prices (USO) have also been driving the Energy Select Sector SPDR ETF (XLE). Since the beginning of this year, XLE has fallen ~13.0%. The broader market, or the S&P 500 ETF (SPY), has risen ~10.0% in the same period.

As we’ve already seen, Cabot Oil & Gas stock rose ~1.3% after its 2Q17 earnings. That shows that the markets reacted positively to the company’s 2Q17 earnings. To know more about how the company performed in 2Q17, read the previous two parts of this series.

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Key financial highlights in 2Q17

Cabot Oil & Gas noted that its cash flow from operating activities in 2Q17 was $260.6 million, which was 206.0% higher than the prior year’s corresponding quarter. It also generated positive free cash flow (cash flow from operating activities less capital expenditures) for the fifth consecutive quarter.

As we saw in Part 1 of this series, the company repurchased 3.0 million shares in 2Q17.

Cabot had a total debt of $1.5 billion as of June 30, 2017. Cash on hand was $516.5 million. COG’s net debt to trailing 12-month EBITDAX (earnings before interest, tax, depreciation, amortization, and exploration expenses) ratio and net debt to adjusted capitalization ratio were 1.1x and 27.6%, respectively, compared to 1.8x and 28.5%, respectively, as of December 31, 2016.

Combined with its available credit facility of $1.7 billion, COG’s liquidity was about $2.2 billion at the end of 2Q17.


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