EQT Reported Revenue Growth, Net Profit Margins Fell

EQT’s 1Q18 revenue growth

EQT (EQT) reported revenue growth of ~60% in 1Q18 on April 26—compared to revenue growth of 64% reported in 1Q17 and ~198% in 4Q17.

EQT’s revenues increased mainly due to higher sales volumes of natural gas, oil, and NGLs. Production volumes increased 88% due to the acquisition of Rice Energy and increased production from the company’s 2016 and 2017 drilling programs.

EQT Reported Revenue Growth, Net Profit Margins Fell

The revenue growth in 1Q18 was slightly lower compared to 1Q17 due to lower growth in natural gas, oil, and NGLs sales. In 1Q18, the revenue growth was 82% compared to 85% growth in the segment in 1Q17. The gain on derivatives not designated as hedges was 55% lower YoY (year-over-year) in 1Q18—compared to 29% YoY growth in 1Q17.

Looking at EQT’s 4Q17 revenue figures, the company posted a gain on derivatives not designated as hedges of $167.33 million in 4Q17—compared to a loss on derivatives of $216.65 million in 4Q16, which significantly lowered EQT’s 4Q16 revenues.

EQT’s 2Q17 revenue growth was higher due to an 89% YoY increase in natural gas, oil, and NGLs. The company reported a gain on derivatives not designated as hedges of $46.33 million—compared to a loss on derivatives of $234.7 million reported in 2Q16.

EQT’s net profit margin trends

EQT’s 1Q18 net profit margin was -110.63%. In comparison, it was 18.27% in 1Q17 and ~7.1% in 4Q17. The company’s net loss in 1Q18 was $1.58 billion versus a net income of ~$164 million reported in 1Q17 and a net income of $1.28 billion reported in 4Q17.

According to EQT, the net loss in 1Q18 was impacted by impairment charges of $2.3 billion, an increase in other operating costs, lower gains on derivatives not designated as hedges, and higher interest expenses—which more than offset higher revenues and lower corporate income taxes.

Next, we’ll discuss EQT’s production in 1Q18.