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COG’s Second-Quarter Revenue to Fall: Impact on Earnings

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COG’s Q2 2018 revenue estimates

Cabot Oil & Gas (COG) plans to release its second-quarter earnings on July 27. Revenue estimates stand at ~$384.96 million. COG’s revenue was ~$460.57 million in the second quarter of 2017.

As you can see in the graphs above, Cabot Oil & Gas’s quarterly revenue for the second quarter is expected to decline year-over-year, likely due to the lower production forecasts in the second quarter compared to Q2 2017—which we’ll discuss in the next part of this series. Lower expected natural gas price (UNG) realizations might also explain the anticipated decline.

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COG’s Q2 2018 EPS estimates

Cabot Oil & Gas’s second-quarter EPS estimate is at $0.19. In comparison, COG’s EPS in the second quarter of 2017 was $0.14.

COG’s peers EQT Corporation (EQT), Noble Energy (NBL), and Antero Resources (AR) are expected to report second-quarter EPS of $0.48, $0.22, and $0.18, respectively, compared to their respective Q2 2017 EPS of $0.06, $0.05, and -$0.04.

COG’s second-quarter earnings are therefore expected to rise year-over-year despite a drop in year-over-year revenues. This outlook could be due to lower forecasts for operating expenses this year, primarily as a result of the Eagle Ford asset divestiture. In the first-quarter earnings release, COG management provided guidance for operating expenses for the remaining nine months of 2018. Direct operations expenses are forecast at $0.09 per Mcfe (thousand cubic feet equivalent), compared to the 2017 average of $0.15 per Mcfe. Transportation and gathering expenses are expected to average $0.67 per Mcfe, compared to $0.70 per Mcfe in 2017. Depreciation, depletion, and amortization expenses are forecast to average ~$0.51 per Mcfe, compared to $0.83 per Mcfe in 2017.

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