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Continental Resources Stock Fell 3% after Its 1Q18 Earnings

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Dec. 4 2020, Updated 10:53 a.m. ET

CLR’s stock performance

The day after Continental Resources’ (CLR) aftermarket 1Q18 earnings release on May 2, CLR stock fell ~3.0% on May 3. CLR stock fell despite better-than-expected revenues and earnings in 1Q18. In general, US stocks fell on May 3 due to ongoing trade tensions between the US and China. This scenario has been rattling investor sentiment for some time.

CLR stock rose again, although it has remained lower than its pre-earnings close. As we can see in the chart above, CLR stock has displayed an uptrend since last year. Year-over-year, its stock has risen ~53.6%.

The Energy Select Sector SPDR ETF (XLE) has increased ~9.1% YoY. The SPDR S&P 500 ETF (SPY), which tracks the broader market, has risen ~11.4% in the same period.

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1Q18 key highlights

Continental Resources (CLR) generated $207.0 million in free cash flow in 1Q18, enabling the company to reduce its existing revolving balance to zero. 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 company’s long-term target debt reduction target is $5.0 billion.

On April 30, Fitch assigned an investment-grade rating to the company. On February 12, CLR received an upgrade from S&P to an investment-grade rating.

Continental Resources’ CEO, Harold Hamm, commented during the company’s 1Q18 earnings release, “Coupled with oil-weighted production growth and industry-leading efficiencies, we remain focused on maximizing returns and generating free cash flow now approaching $1 billion in 2018, at current commodity prices.”

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