Gulfport Energy (GPOR) Down 40.6% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Gulfport Energy (GPOR). Shares have lost about 40.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Gulfport Energy due for a breakout? 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 drivers.

Gulfport Q4 Earnings and Revenues Miss Estimates

Gulfport Energy Corporation witnessed lower-than-expected results in fourth-quarter 2019 as both earnings and sales lagged estimates.

This Oklahoma-based company reported fourth-quarter adjusted net earnings per share (EPS) of 5 cents, missing the Zacks Consensus Estimate of 18 cents. Moreover, the bottom line was below the year-ago EPS of 46 cents a share amid weaker year-over-year natural gas price realizations and higher costs.

Further, revenues of $281.2 million fell short of the Zacks Consensus Estimate of $316 million. The top line also plunged from the year-ago figure of $416 million.

Production & Realized Prices

Gulfport’s total oil and gas production decreased to 123,866 million cubic feet equivalent (MMcfe) from 128,139 MMcfe in the corresponding period of last year. Of the total output, 92.4% comprised natural gas. Gas production from the Utica Shale declined 2.3% year over year to 100,324 MMcfe. Nearly 81% of the output came from the Utica acreage. Output from SCOOP came in at 23,451 MMcfe, lower than the year-ago level of $24,406 MMcfe.

Average realized natural gas price (before the impact of derivatives) during the fourth quarter was $1.78 per thousand cubic feet, lower than the year-ago period’s $3.16. Average realized natural gas liquids price was 49 cents per gallon, down from the year-ago quarter’s 67 cents. Gulfport fetched $53.23 per barrel of oil during the quarter, down from the year-ago figure of $58.45. Overall, the company realized $2.03 per thousand cubic feet equivalent in the quarter compared with $3.45 a year ago.

Costs, Capex and Balance Sheet

Total expenses in the quarter under review amounted to $1.72 billion, higher than $259.5 million in the prior-year period. This rise is mainly attributed to higher general and administrative costs, depreciation, and impairment and restructuring charges incurred in the reported quarter. Depreciation costs flared up 7.2% from the prior-year quarter to $143.45 million.

In the reported quarter, Gulfport spent $123.4 million on drilling and completion. As of Dec 31, this natural gas-weighted energy explorer had $6.06 million in cash and cash equivalents. Gulfport had a long-term debt of $1,978 million, representing a debt-to-capitalization ratio of 60.07%.

2020 Guidance

This upstream player expects current-year capex in the band of $285-$310 million, indicating 50% decline from the figure reported in 2019. It projects full-year production within 1,100-1,150 MMcfe/d. The company expects natural gas price realizations (before the effects of hedges and including transportation) between 70 cents and 80 cents per thousand cubic feet in 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -658.65% due to these changes.

VGM Scores

At this time, Gulfport Energy has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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, Gulfport Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.