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Continental Resources’ 1Q18 Earnings and Revenues Beat Estimates

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May. 3 2018, Published 10:28 a.m. ET

CLR’s 1Q18 revenues

Continental Resources (CLR) released its earnings on May 2 after the markets closed. CLR’s revenues for 1Q18 totaled $1.14 billion, which beat analysts’ estimates of $1.05 billion. In 1Q17, CLR reported revenues of ~$685.43 million. In 4Q17, CLR reported revenues of ~$1.05 billion.

As we can observe from the chart above, CLR’s revenues were higher on a year-over-year basis as well as on a sequential basis. Crude oil and natural gas sales, which made up ~98.0% of CLR’s total revenues in 1Q18, reached ~$1.1 billion, compared to ~$633.9 million in 1Q17 and ~$1.0 billion in 4Q17.

Higher crude oil and natural gas sales resulted from higher realized prices in 1Q18 versus 1Q17 and 4Q17. Average realized prices on a crude oil equivalent basis in 1Q18 reached $41.26 per boe (barrels of oil equivalent) compared to $32.90 per boe in 1Q17 and $38.27 per boe in 4Q17.

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CLR’s 1Q18 earnings

For 1Q18, Continental Resources reported adjusted EPS (earnings per share) of $0.68, compared with Wall Street analysts’ consensus estimate of $0.60. In 1Q17, CLR reported EPS of $0.02, and the company reported EPS of $0.41 in 4Q17.

Like its revenues, CLR’s 1Q18 earnings beat Wall Street analysts’ estimates and were higher on a year-over-year and a sequential basis. CLR’s higher 1Q18 earnings were driven by higher revenues, which were driven by higher price realizations.

1Q18 key highlights

CLR’s management noted that the company generated $207.0 million in free cash flow, enabling the company to reduce its existing revolving balance to zero and build its cash on hand. At the end of 1Q18, Continental Resources had total debt of ~$6.2 billion, which is close to the company’s short-term goal of $6.0 billion. The long-term target is $5.0 billion.

On April 30, Fitch assigned an investment-grade rating to the company. On February 12, CLR saw an upgrade by S&P to investment grade, noting that this “reflects positive free cash flow and an improving leverage profile.”

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