Range Resources (RRC) Beats Q3 Earnings, Misses Revenues

Upstream energy player Range Resources Corporation (NYSE:RRC) reported third-quarter 2017 adjusted earnings of 5 cents per share that surpassed the Zacks Consensus Estimate of 2 cents. The company had incurred a loss of 6 cents in the year-ago quarter.

Total revenue of $482.2 million failed to beat the Zacks Consensus Estimate of $530 million but jumped 17% year over year from $413.2 million.

The third-quarter numbers were supported by an increase in oil and gas equivalent production and price realizations, partially offset by higher expenses.

Operational Performance

The company’s third-quarter production averaged almost 1,986.2 million cubic feet equivalent per day (MMcfe/d). Natural gas made up for 66.6% of the total production, while natural gas liquids (NGLs) and oil accounted for the remaining 33.4%.

Total production volume not only improved 32% from the year-earlier quarter but also beat the Zacks Consensus Estimate of production of 1,983 MMcfe/d. The improvement was aided by the company’s highly successful drilling program.

On a year-over-year basis, oil production increased 59%, while NGL production rose 32%. Moreover, natural gas production jumped 30% year over year.

The company’s total price realization (including the effects of hedges and derivative settlements) averaged $1.82 per Mcfe, up 15% year over year. Of this, NGL prices rose 29% to $8.54 per barrel while crude oil prices fell 3% to $48.46 per barrel, both on a year-over-year basis. Natural gas prices were up 12% year over year to $1.60 per Mcf.

Expenses

Total third-quarter 2017 expenses were $681.9 million, up 45% year over year.

Financials

At the end of the quarter, the company had long-term debt of approximately $3,981.9 million with a debt-to-capitalization ratio of 41.8%. The company incurred expenditures of $305 million in the third quarter for drilling and completion of 35 wells.

Q3 Price Performance

During the July-September quarter of 2017, Range Resources lost 15.5%, underperforming the industry’s 5.1% gain.

Guidance

For the fourth quarter of 2017, the company maintained the estimate of 2.2 billion cubic feet equivalent (Bcfe) per day. With this, the annual output will likely rise 30%.

Range Resources also reiterated the 2017 capital budget at $1.15 billion.

Zacks Rank & Key Picks

Currently, Range Resources carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector are Par Pacific Holdings Inc. (NYSE:PARR) , Northern Oil and Gas, Inc. (NYSE:NOG) and Canadian Natural Resources Limited (TO:CNQ) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Houston, TX, Par Pacific managed to beat the Zacks Consensus Estimate in three of the last four quarters, the average earnings surprise being 195.26%.

Based in based in Minnetonka, MN, Northern Oil and Gas is an upstream energy player. The company’s 2017 revenues are estimated to grow 44.1%.

Canadian Natural, headquartered in Calgary, Canada, is primarily an upstream energy firm. The firm will likely witness year-over-year earnings growth of 234.8% for 2017.

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