A month has gone by since the last earnings report for Range Resources (RRC). Shares have added about 13.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Range Resources due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Range Resources Q3 Earnings Beat on Higher Production
Range Resources Corporation reported third-quarter 2024 adjusted earnings of 48 cents per share, which beat the Zacks Consensus Estimate of 35 cents. The bottom line also improved from the prior-year level of 46 cents.
Total quarterly revenues of $680 million beat the Zacks Consensus Estimate of $627 million. The top line also increased from the prior-year figure of $649 million.
The strong quarterly results can be primarily attributed to higher gas equivalent production volumes.
Operational Performance
The company’s production averaged 2,204.5 million cubic feet equivalent per day (Mcfe/d), higher than the prior-year level of 2,123 Mcfe/d. The figure was also above our projection of 2,118.3 Mcfe/d. Natural gas contributed approximately 68% to the company’s total production, while NGLs and oil accounted for the rest.
Natural gas production increased 4% year over year. Oil production decreased 12%, while NGL output increased 5% in the same time frame.
Total price realization (excluding derivative settlements and before third-party transportation costs) averaged $2.63 per Mcfe, down 3% year over year. Notably, price realization was higher than our estimate of $2.59 per Mcfe. Natural gas price declined 9% on a year-over-year basis to $1.69 per Mcf. NGL price increased 6%, while oil price fell 9%.
Costs & Expenses
Total costs and expenses increased 1% year over year to $549 million. The reported figure was higher than our expectation of $528.2 million. Transportation, gathering, processing and compression costs, which form a major part of the total costs, increased to $306.2 million from $277.2 million in the prior-year quarter.
Capital Expenditure & Balance Sheet
The company’s drilling and completion expenditure amounted to $146 million in the reported quarter. Additionally, $10 million was used for acreage leasehold, gathering systems and other expenses.
RRC had a total debt of $1,706.5 million at the end of the reported quarter.
Outlook
Range Resources has increased its total production guidance for 2024 to 2.17 billion cubic feet equivalent per day, with more than 30% attributed to liquids production. It has also estimated a capital budget of $645-$670 million for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.54% due to these changes.
VGM Scores
Currently, Range Resources has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Range Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
