A month has gone by since the last earnings report for Antero Resources (AR). Shares have added about 11.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Antero 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 its most recent earnings report in order to get a better handle on the important catalysts.
Antero Q4 Earnings and Revenues Beat Estimates
Antero Resources Corporation reported fourth-quarter 2023 adjusted earnings of 22 cents per share, which beat the Zacks Consensus Estimate of 18 cents. However, the bottom line significantly declined from the year-ago quarter’s $1.04.
Total quarterly revenues of $1.19 billion surpassed the Zacks Consensus Estimate of $1.17 billion. The top line decreased from the year-ago quarter’s $2.1 billion.
Better-than-expected quarterly earnings can be primarily attributed to higher production volumes, driven by strong well performance and lower operating expenses. A substantial decline in commodity price realization has offset the positives.
Overall Production
Total production through the fourth quarter was 315 billion cubic feet equivalent (Bcfe), up 6% from the 297 Bcfe recorded a year ago. The reported figure is slightly below our estimate of 321 Bcfe.
Natural gas production (accounting for 67% of the total production) was 210 Bcf, up 7% from the 196 Bcf recorded a year ago and higher than our estimate of 205 Bcf.
Oil production in the quarter amounted to 1,154 thousand barrels (MBbls), up 46% from the 790 MBbls registered in the year-ago period.
AR reported production of 5,406 MBbls of C2 Ethane, down 6% from the 5,778 MBbls recorded a year ago. Our estimate for the same was pinned at 6,047 MBbls.
The company’s production of 10,918 MBbls of C3+ NGLs was 7% higher than the 10,170 MBbls reported in the year-ago period. The figure also surpassed our estimate of 10,853 MBbls.
Weighted natural-gas-equivalent price realization in the quarter was $3.52 per thousand cubic feet equivalent (Mcfe), lower than the year-ago quarter’s figure of $6.07. Our estimate for the same was pegged at $3.26 Mcfe.
Realized prices for natural gas declined 57% to $2.72 per Mcf from the $6.27 recorded a year ago. The figure also lagged our estimate of $2.85 per Mcf.
The company’s oil price realization in the quarter was $64.77 per barrel (Bbl), down 9% from $71.08 registered a year ago. The figure was also lower than our estimate of $66.31 per Bbl.
The realized price for C3+ NGLs declined to $37.72 per Bbl from $39.88 reported a year ago and also lagged our estimate of $39.35 per Bbl.
The realized price for C2 Ethane decreased 52% to $9.13 per Bbl from the $18.96 recorded a year ago. The figure also missed our estimate of $13.90 per Bbl.
Operating Expenses
Total operating expenses decreased to $1.03 billion from the $1.14 billion reported in the year-ago period. Our estimate for the same was pinned at $1.03 million.
However, average lease operating costs were 9 cents per Mcfe, down 10% from the 10 cents recorded in the year-ago period. The gathering and compression costs decreased 10% year over year to 69 cents per Mcfe.
Transportation expenses declined 6% from the prior-year quarter’s level to 62 cents per Mcfe, while processing costs increased 7% to 79 cents per Mcfe.
Capex & Financials
In the fourth quarter, Antero Resources spent $164 million on drilling and completion operations. As of Dec 31, 2023, it had no cash and cash equivalents. The company had a long-term debt of $1.54 billion as of the same date.
Guidance
For 2024, Antero Resources expects net daily natural gas-equivalent production of 3.3-3.4 Bcfe/d, including 192-204 MBbl/d of liquids. The company provided cash production expense guidance of $2.45-$2.55 per Mcfe. The company projects net marketing expenses of $0.04-$0.06 per Mcfe.
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 -14.82% due to these changes.
VGM Scores
Currently, Antero Resources has a poor Growth Score of F, a grade with the same score on the momentum front. 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 F. 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 this revision indicates a downward shift. Notably, Antero Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Antero Resources belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, Comstock Resources (CRK), has gained 8.9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Comstock reported revenues of $410.58 million in the last reported quarter, representing a year-over-year change of -55.5%. EPS of $0.10 for the same period compares with $1.05 a year ago.
For the current quarter, Comstock is expected to post earnings of $0.07 per share, indicating a change of -78.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -74.5% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Comstock. Also, the stock has a VGM Score of C.
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