DCP – DCP Midstream (DCP) Q4 Earnings Beat Estimates, Revenues Miss

DCP Midstream, LP (DCP Free Report) reported fourth-quarter 2021 adjusted earnings of 83 cents per unit, beating the Zacks Consensus Estimate of earnings of 79 cents. The bottom line increased from the year-ago quarter’s profit of 34 cents per unit.

Total quarterly revenues of $3,477 million missed the Zacks Consensus Estimate of $5,305 million. However, the top line increased from $1,785 million in the year-ago quarter.

The better-than-expected earnings were backed by increased wellhead volumes in the North and Midcontinent. The positives were partially offset by a decline in NGL pipelines throughput volumes as well as higher costs and expenses.

DCP Midstream Partners, LP Price, Consensus and EPS Surprise

 

Operations

Logistics and Marketing

The segment recorded adjusted EBITDA of $161 million in the fourth quarter, down from the year-ago period’s $183 million. Lower NGL pipelines throughput volumes affected the segment. The negatives were partially offset by higher Sand Hills, Southern Hills and Front Range volumes.

The average NGL pipelines throughput for the quarter was 692 thousand barrels per day (Mbpd), higher than the year-ago quarter’s level of 610 Mbpd. Fractionator throughputs were recorded at 57 Mbpd, up from the year-ago quarter’s level of 54 Mbpd.

Gathering and Processing

The segment reported adjusted EBITDA of $237 million in the fourth quarter, up from $181 million in the year-ago quarter. Increased wellhead volumes in the North and Midcontinent and favorable commodity prices aided the segment. The positives were partially offset by lower South region volumes.

Average natural gas wellhead volumes for the quarter declined to 4,151 million cubic feet per day (MMcf/d) from the year-ago period’s 4,442 MMcf/d. NGL gross production totaled 417 Mbpd, up from the year-ago quarter’s level of 414 Mbpd.

Total Expenses

Purchases and related costs significantly increased year over year in the quarter under review. Operating and maintenance expenses rose to $177 million from $160 million in the fourth quarter of 2020.

Total operating costs and expenses in the fourth quarter were $3,225 million, up from the year-ago quarter’s figure of $1,740 million.

Financials

For fourth-quarter 2021, total expansion capital expenditures and equity investments were $16 million. Sustaining capital for the quarter was $23 million. DCP generated an excess free cash flow of $122 million in the reported quarter.

At the end of fourth-quarter 2021, the partnership reported long-term debt of $5,078 million. Cash and cash equivalents were $1 million. It had current debt of $355 million, reflecting a debt to capitalization of 48.2%.

Guidance

For 2022, DCP Midstream projects adjusted EBITDA in the range of $1,350-$1,500 million. It expects a distributable cash flow of $900-$1,010 million, while excess free cash flow is projected to be $425-$585 million.

The partnership anticipates sustaining capital expenditures of $100-$140 million for the year. Growth capital expenditure is anticipated to be $100-$150 million.

Zacks Rank & Stocks to Consider

The partnership currently has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that turned in strong bottom-line numbers in the fourth quarter and presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA Inc. (MUSA Free Report) , based in El Dorado, AR, is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA reported fourth-quarter 2021 adjusted earnings per share (EPS) of $4.23, beating the Zacks Consensus Estimate of $3.68.

Murphy USA currently has a Zacks Style Score of A for Growth, Value and Momentum. As of Dec 31, Murphy USA had cash and cash equivalents of $256.4 million. MUSA is committed to returning excess cash to shareholders through continued share buyback programs.

ConocoPhillips (COP Free Report) , based in Houston, TX, is primarily involved in the exploration and production of oil and natural gas. COP reported fourth-quarter 2021 adjusted EPS of $2.27, comfortably beating the Zacks Consensus Estimate of $2.20.

ConocoPhillips’earnings for 2022 are expected to soar 62.1% year over year. COP reported preliminary 2021 year-end proved reserves at 6.1 billion BoE. As of Dec 31, 2021, ConocoPhillips had $5,028 million in total cash and cash equivalents.

Exxon Mobil Corporation (XOM Free Report) , based in Irving, TX, is one of the leading integrated energy companies in the world. XOM reported fourth-quarter 2021 earnings per share of $2.05 — excluding identified items — beating the Zacks Consensus Estimate of $1.96 per share.

ExxonMobil is expected to see an earnings growth of 27.3% in 2022. ExxonMobil has initiated share repurchases at the beginning of the March quarter of this year. The buybacks are associated with the repurchase plan announced earlier, representing the program of repurchasing up to $10 billion over the next 12-24 months.

EQT – EQT Corporation (EQT) Q4 Earnings & Revenues Miss Estimates

EQT Corporation (EQT Free Report) reported fourth-quarter 2021 adjusted earnings from continuing operations of 41 cents per share, missing the Zacks Consensus Estimate of earnings of 51 cents. The bottom line improved from the year-ago quarter’s loss of 2 cents.

Adjusted operating revenues increased to $1,410 million from $1,253 million in the prior-year quarter. The top line missed the Zacks Consensus Estimate of $1,446 million.

The lower-than-expected results stemmed from higher processing and lease operating expenses. The negatives were partially offset by increased production volumes and higher realizations of commodity prices.

EQT Corporation Price, Consensus and EPS Surprise

 

Q4 Operations

Production

Sales volumes increased to 527 billion cubic feet equivalent (Bcfe) per day from the year-ago quarter’s figure of 401 Bcfe. Natural gas sales volume was 497.2 Bcf in the fourth quarter, up from 375.7 Bcf a year ago. Total liquids sales volume in the quarter was recorded at 4,973 thousand barrels (MBbls) versus the year-ago period’s 4,214 MBbls.

Commodity Price Realizations

The average realized price was $2.68 per thousand cubic feet of natural gas equivalent (Mcfe), up from the year-ago quarter’s level of $2.30 per Mcfe. Natural gas price was recorded at $6.1 per Mcf, up from the year-ago quarter’s level of $2.82. Oil prices were recorded at $68.5 per barrel, up from $31.61 in fourth-quarter 2020. Also, the ethane sales price was recorded at $11.93 per barrel for the fourth quarter, higher than the year-ago quarter’s level of $3.70.

Expenses

Total operating expenses were $1.26 per Mcfe for the fourth quarter of 2021, down from $1.30 in the prior-year quarter.

Processing expenses were 10 cents per Mcfe, up from the year-ago quarter’s 9 cents. Lease operating expenses increased to 8 cents from the year-ago quarter’s level of 7 cents.  However, gathering expenses were down to 65 cents per Mcfe from 70 cents a year ago. Further, transmission costs declined to 27 cents per Mcfe from the year-ago quarter’s level of 30 cents.

Cash Flows

EQT Corporation’s adjusted operating cash flow was $741 million in the quarter, up from $370.5 million a year ago. Free cash flow for the quarter was $422.2 million, up from the year-ago quarter’s free cash outflow of $109.4 million.

Capex & Balance Sheet

Total capital expenditures amounted to $322.7 million in the fourth quarter, up from $266 million a year ago.

As of Dec 31, 2021, the company had $114 million in cash and cash equivalents, up sequentially from $22.8 million. Total debt was reported at $5,485 million, down from $6,189.6 million at the third-quarter end.

Reserves

At 2021-end, EQT Corporation had total proved reserves of 25 trillion cubic feet equivalent (Tcfe), up 26% from the 2020 levels of 19.8 Tcfe. Through 2021, the company produced 1,857,817 million cubic feet equivalent of natural gas. Of the total volumes, natural gas comprises almost 94%.

Guidance

For 2022, the largest natural gas producer of the United States expects total sales volumes of 1,950-2,050 Bcfe. For first-quarter 2022, total sales volumes are expected to be 475-525 Bcfe.

The company expects total per-unit operating costs of $1.25-$1.37 per Mcfe for the year. Adjusted earnings before interest, taxes, depreciation and amortization are expected to be $3.1-$3.3 billion. Capital expenditures for the year are anticipated to be $1.3-$1.45 billion.

EQT Corporation’s free cash flow is projected to be $1.4-$1.75 billion. The company expects to achieve net-zero emissions from Scope 1 and 2 within 2025.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at the following stocks that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Valero Energy Corporation (VLO Free Report) is the largest independent refiner and marketer of petroleum products in the United States. VLO reported fourth-quarter 2021 adjusted earnings of $2.47 per share, improving from a loss of $1.06 in the year-ago quarter.

Valero is expected to see an earnings growth of 150.2% in 2022. Among all the independent refiners, Valero offers the most diversified refinery base with a capacity of 3.1 million barrels per day in its 15 refineries located throughout the United States, Canada and the Caribbean. VLO’s Refining segment was responsible for 81.7% of the total margin in 2021.

Houston, TX-based Occidental Petroleum (OXY Free Report) is an integrated oil and gas company, with significant exploration and production exposure. As of 2020-end, Occidental’s preliminary worldwide proved reserves totaled 2.91 billion Boe compared with 3.9 billion Boe at 2019-end.

Occidental Petroleum’s earnings for 2022 are expected to surge 80.3% year over year. OXY also witnessed four upward revisions in the past 30 days. It currently holds a Zacks Style Score of A for Momentum and B for Growth. OXY beat the Zacks Consensus Estimate thrice in the last four quarters and missed once, with an earnings surprise of 13.7%, on average.

SM Energy (SM Free Report) is one of the most attractive players in the exploration and production space. It engages in the exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. SM’s operations are focused in the Permian basin and the South Texas & Gulf Coast region. It has total of 443,188 net acres under its possession, of which 33.5% is developed.

SM Energy’s earnings for 2022 are expected to surge 334.4% year over year. SM currently sports a Zacks Style Score of A for Growth and B for Value. The upstream energy player beat the Zacks Consensus Estimate thrice in the last four quarters and missed once, with an earnings surprise of 126.3%, on average.

AGCO – Agco (AGCO) Crossed Above the 200-Day Moving Average: What That Means for Investors

Agco (AGCO Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, AGCO crossed above the 200-day moving average, suggesting a long-term bullish trend.

The 200-day simple moving average is widely-used by traders and analysts, and helps establish market trends for stocks, commodities, indexes, and other financial instruments over the long term. The indicator moves higher or lower together with longer-term price moves, serving as a support or resistance level.

Moving Average Chart for AGCO

Shares of AGCO have been moving higher over the past four weeks, up 5.8%. Plus, the company is currently a Zacks Rank #2 (Buy) stock, suggesting that AGCO could be poised for a continued surge.

The bullish case only gets stronger once investors take into account AGCO’s positive earnings estimate revisions. There have been 3 higher compared to none lower for the current fiscal year, and the consensus estimate has moved up as well.

Investors may want to watch AGCO for more gains in the near future given the company’s key technical level and positive earnings estimate revisions.

ON – ON Semiconductor Corp. (ON) is a Top-Ranked Momentum Stock: Should You Buy?

It doesn’t matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

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Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores?

The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on — that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

For value investors, it’s all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.

Growth Score

While good value is important, growth investors are more focused on a company’s financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum Score

Momentum investors, who live by the saying “the trend is your friend,” are most interested in taking advantage of upward or downward trends in a stock’s price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM Score

If you like to use all three kinds of investing, then the VGM Score is for you. It’s a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank

A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company’s earnings outlook, to help investors create a successful portfolio.

It’s highly successful, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988. That’s more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That’s where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company’s earnings outlook should be a deciding factor when picking which stocks to buy.

Here’s an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: ON Semiconductor Corp. (ON Free Report)

ON Semiconductor or onsemi, is an original equipment manufacturer of a broad range of discrete and embedded semiconductor components. The company was spun off from Motorola in Aug 1999 and went public through an IPO in May 2000.

ON is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of B.

Momentum investors should take note of this Computer and Technology stock. ON has a Momentum Style Score of A, and shares are up 0.9% over the past four weeks.

11 analysts revised their earnings estimate higher in the last 60 days for fiscal 2022, while the Zacks Consensus Estimate has increased $0.79 to $4.07 per share. ON also boasts an average earnings surprise of 16.3%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, ON should be on investors’ short list.

WLL – Here's Why Whiting Petroleum Corporation (WLL) Could be Great Choice for a Bottom Fisher

The price trend for Whiting Petroleum Corporation (WLL Free Report) has been bearish lately and the stock has lost 10.3% over the past week. However, the formation of a hammer chart pattern in its last trading session indicates that the stock could witness a trend reversal soon, as bulls might have gained significant control over the price to help it find support.

While the formation of a hammer pattern is a technical indication of nearing a bottom with potential exhaustion of selling pressure, rising optimism among Wall Street analysts about the future earnings of this company is a solid fundamental factor that enhances the prospects of a trend reversal for the stock.

1-month candlestick chart for WLL What is a Hammer Chart and How to Trade It?

This is one of the popular price patterns in candlestick charting. A minor difference between the opening and closing prices forms a small candle body, and a higher difference between the low of the day and the open or close forms a long lower wick (or vertical line). The length of the lower wick being at least twice the length of the real body, the candle resembles a ‘hammer.’

In simple terms, during a downtrend, with bears having absolute control, a stock usually opens lower compared to the previous day’s close, and again closes lower. On the day the hammer pattern is formed, maintaining the downtrend, the stock makes a new low. However, after eventually finding support at the low of the day, some amount of buying interest emerges, pushing the stock up to close the session near or slightly above its opening price.

When it occurs at the bottom of a downtrend, this pattern signals that the bears might have lost control over the price. And, the success of bulls in stopping the price from falling further indicates a potential trend reversal.

Hammer candles can occur on any timeframe — such as one-minute, daily, weekly — and are utilized by both short-term as well as long-term investors.

Like every technical indicator, the hammer chart pattern has its limitations. Particularly, as the strength of a hammer depends on its placement on the chart, it should always be used in conjunction with other bullish indicators.

Here’s What Makes the Trend Reversal More Likely for WLL

An upward trend in earnings estimate revisions that WLL has been witnessing lately can certainly be considered a bullish indicator on the fundamental side. That’s because empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

Over the last 30 days, the consensus EPS estimate for the current year has increased 6.2%. What it means is that the sell-side analysts covering WLL are majorly in agreement that the company will report better earnings than they predicted earlier.

If this is not enough, you should note that WLL currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises. And stocks carrying a Zacks Rank #1 or 2 usually outperform the market. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>

Moreover, the Zacks Rank has proven to be an excellent timing indicator, helping investors identify precisely when a company’s prospects are beginning to improve. So, for the shares of Whiting Petroleum Corporation, a Zacks Rank of 1 is a more conclusive fundamental indication of a potential turnaround.