Pioneer Natural (PXD) Down 3.4% Since Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Pioneer Natural Resources Company (NYSE:PXD) . Shares have lost about 3.4% in that time frame.

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

Fourth-Quarter 2017 Results

Pioneer Natural Resources Company reported fourth-quarter 2017 earnings, excluding one-time items, of $1.22 per share. The bottom line beat the Zacks Consensus Estimate of 76 cents. Notably, the company posted adjusted earnings of 49 cents per share in the year-earlier quarter.

Revenues and other income in the quarter improved 30.6% year over year to $1,526 million from $1,168 million. However, the top line lagged the Zacks Consensus Estimate of $1,716 million.

Higher oil and liquids price realizations and production along with Spraberry/Wolfcamp horizontal drilling program drove fourth-quarter results.

Dividend

Pioneer Natural raised dividend by 300% to 16 cents per share from 4 cents. The dividend is payable on Apr 12 to stockholders of record at the close of business on Mar 29.

Production

Total production in the reported quarter averaged approximately 305 thousand barrels of oil equivalent per day (MBOE/d), up 26.1% year over year and surpassed the Zacks Consensus Estimate of 298 MBOE/d. The upside can be attributed to the Spraberry/Wolfcamp horizontal drilling program.

Oil production averaged 179.7 thousand barrels per day (MBbl/d), up 25.8% year over year and surpassed the Zacks Consensus Estimate of 176 MBbl/d. Natural gas liquids (NGLs) production jumped 41% year over year to 62.4 MBbl/d and came above the Zacks Consensus Estimate of 60 MBbl/d. Natural gas productions increased to 377.1 million cubic feet per day (MMcf/d) from the year-ago level of 328.5 MMcf/d and beat the Zacks Consensus Estimate of 298 MBOE/d.

Price Realization

On an oil equivalent basis, average realized price was $38.68 per barrel in the reported quarter against $33.84 a year ago and surpassed the Zacks Consensus Estimate of $37.69. The average realized price for oil was $52.81 per barrel compared with $46.13 in fourth-quarter 2016 and higher than the Zacks Consensus Estimate of $51.

Average natural gas price declined 2.3% year over year to $2.53 per thousand cubic feet (Mcf) and lagged the Zacks Consensus Estimate of $2.64. Natural gas liquids were sold at $21.64 per barrel, up from the $16.76 in the year-ago quarter but below the Zacks Consensus Estimate of $22.15.

Cash, Debt and Capex

At the end of the quarter, cash balance was $896 million. Long-term debt was $2,283 million, which represents debt-to-capitalization ratio of 16.8%.

Capital Outlay

For 2018, Pioneer Natural intends to spend $2.9 billion. Of this, the company will allocate $2.65 billion for drilling and completion and $260 million for water infrastructure, vertical integration and field facilities.

An amount of $2.63 billion has been allocated for the Permian Basin and $20 million for other assets.

Guidance

Pioneer Natural expects production between 304 MBOE/d and 314 MBOE/d in the first quarter of 2018. For first quarter, the company expects production costs in the range of $7-$9 per BOE. General and administrative expenses are expected in the range of $80-$85 million.

Proved Reserves

As of Dec 31, 2017, total proved reserves for the company was 985 million barrels of oil equivalent (MMBOE) compared with 726 MMBOE as of Dec 31, 2016.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been seven revisions higher for the current quarter.

Pioneer Natural Resources Company Price and Consensus

Pioneer Natural Resources Company Price and Consensus | Pioneer Natural Resources Company Quote

VGM Scores

At this time, PXD has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise PXD has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.