It has been about a month since the last earnings report for Ultra Petroleum Corp. (NASDAQ:UPL) . Shares have lost about 2.5% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is UPL 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 Earnings
Ultra Petroleum posted fourth-quarter 2015 adjusted loss from continuing operations of $0.25 per share, wider than the Zacks Consensus Estimate of a loss of $0.11. The wider-than-expected loss stemmed from higher operating expenses and lower commodity price realizations.
The company had posted adjusted earnings of $0.62 per share in the year-ago quarter.
Total operating revenue of $189.3 million not only missed the Zacks Consensus Estimate of $202 million but was also substantially below the fourth-quarter 2014 level of $319.1 million.
Production
Production during the reported quarter increased year over year to 73.8 billion cubic feet equivalent (Bcfe) from 70.6 Bcfe. Natural gas volumes – that accounted for approximately 93.4% of the total – increased 7.3% year over year to 68.9 Bcfe. Oil production, however, declined to 818,083 barrels in the reported quarter from 1,064,855 barrels a year ago.
Realized Prices
Ultra Petroleum's average realized price on natural gas (excluding realized gain or loss on commodity derivatives) plunged 41.9% year over year to $2.33 per thousand cubic feet (Mcf). Also, the average oil price (excluding realized gain or loss on commodity derivatives) for the reported quarter was $35.51 per barrel, substantially below the fourth-quarter 2014 figure of $57.44 per barrel.
Costs, Expenses and Margins
Total lease operating costs decreased nearly 17.8% from the prior-year quarter to approximately $68 million. Ultra Petroleum reported all-in costs of $3.41 per Mcfe as against $3.36 in the comparable quarter last year.
The company witnessed a massive increase in total operating expenses to $3,352.4 million from just $195.1 million in the year-earlier quarter. However, the current quarter figure includes $3,144.9 million in write-downs.
Ultra Petroleum’s adjusted operating cash flow margin came in at 41.4% compared with 57.6% in the prior-year quarter.
Balance Sheet
As of Dec 31, 2015, the company had cash and cash equivalents of approximately $4.1 million and net debt of $3.39 billion.
Guidance
For 2016, production is guided in the 265–280 Bcfe range. For the first quarter of 2016, production is expected to range between 70 Bcfe and 73 Bcfe.
Ultra Petroleum expects total operating cost per Mcfe of $2.25–$2.42 for the first quarter of 2016. Moreover, the company estimates its 2016 capital spending at $260 million. Of the total, Ultra Petroleum plans to spend $239 million in Drilling and Completion projects, $13 million on corporate activities, and the remaining $8 million on other undertakings.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
Ultra Petroleum Corp. Price and Consensus
Ultra Petroleum Corp. Price and Consensus | Ultra Petroleum Corp. Quote
VGM Scores
At this time, UPL has a poor Growth Score of F. Its Momentum is doing a bit better with a D. The stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
UPL has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Ultra Petroleum Corp. (UPL): Free Stock Analysis Report
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