What's In The Offing For Diamondback (FANG) Q4 Earnings?
Zacks Investment Research | Feb 12, 2020 11:03PM ET
Diamondback Energy, Inc. (NASDAQ:FANG) is set to release fourth-quarter 2019 results on Tuesday Feb 18, after the closing bell.
The current Zacks Consensus Estimate for the to-be-reported quarter is pegged at earnings of $1.81 per share on expected revenues of $1.09 billion. There has been no change in estimates for the bottom line over the past 30 days.
Let’s delve into the factors that might have impacted the company’s performance in the December quarter.
Factors Likely to Impact Q4 Results
The twin acquisitions of 2018, namely Energen Corporation and Ajax Resources transformed Diamondback into one of the leading Permian Basin oil producers, driving significant production growth. This trend most likely continued in the fourth quarter of 2019 as well.
Recently, the company reported fourth-quarter average daily production, which surged almost 65% to 301.3 million barrels of oil equivalent per day (MBOE/d) from 182.8 MBOE/d in the corresponding period of last year. The released figure even surpassed the Zacks Consensus Estimate of 295.6 MBOE/D. Of the total output, 65% comprised oil while the rest consisted of natural gas and natural gas liquids. Additionally, the company’s impending results might reflect a stronger impact of realized crude prices than the year-ago recorded figure. The Zacks Consensus Estimate for crude oil prices is pegged at $54 per barrel, hinting at an 18.6% increase from the prior-year reported realization of $45.51.
However, the company’s upcoming quarterly results are expected to reflect a weaker impact of realized natural gas prices than the year-ago reported level. The Zacks Consensus Estimate for fourth-quarter average natural gas price realization stands at 98 cents per thousand cubic feet, implying a 39.5% decline from $1.62 reported a year ago.
While significant output growth is expected to have boosted Diamondback’s fourth-quarter 2019 earnings, lower year-over-year natural gas prices might have dented overall results.
What Does Our Model Say?
The proven Zacks model does not conclusively predict an earnings beat for Diamondback this time around. The right combination of a positive Zacks Investment Research
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