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Denbury Resources Turned Losses into Profits in 1Q18

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Denbury Resources’ 1Q18 adjusted net income

Denbury Resources (DNR) announced its 1Q18 earnings on May 8 before the market opened. The company reported a better-than-expected profit of ~$54 million in 1Q18. Wall Street analysts were expecting a lower profit of ~$43 million. On a year-over-year basis, DNR turned profitable after 1Q17’s loss of ~$7 million. Even excluding one-time items, DNR’s profits increased ~13% sequentially when compared with a profit of ~$48 million in 4Q17.

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Denbury Resources’ 1Q18 reported net income

Denbury Resources’ 1Q18 adjusted net income excludes one-time benefits and charges totaling -$14 million, the majority of which are related to the non-cash fair value adjustments on commodity derivatives. Including these one-time items, DNR’s reported net income on a GAAP basis was ~$40 million, or $0.09 per share in 1Q18. DNR’s reported net income was ~$22 million, or $0.05 per share, in 1Q17.

DNR’s higher reported net income in 1Q18 compared to 1Q17 can be attributed to the higher increase in revenues when compared with total expenses. DNR’s revenues saw an increase of ~29% in 1Q18 when compared with 1Q17. In comparison to the much higher revenues, DNR’s total expenses saw an increase of ~28%, which acted positively on the bottom line.

DNR’s peer Range Resources (RRC) reported a better-than-expected profit of ~$113 million in 1Q18. Wall Street analysts were expecting a lower profit of ~$104 million.

In the next part, we’ll take a look at DNR’s revenues.

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