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Range Resources (RRC) Down 1.5% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Range Resources (RRC). Shares have lost about 1.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Range Resources due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Range Resources Q1 Earnings Beat on Gas Production

Range Resourcesreported first-quarter 2024 adjusted earnings of 69 cents per share, which beat the Zacks Consensus Estimate of 56 cents. However, the bottom line declined from the prior-year quarter’s 99 cents per share.

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Total quarterly revenues of $718 million beat the Zacks Consensus Estimate of $689 million. The top line, however, declined from the prior-year quarter’s figure of $853 million.

Better-than-expected quarterly results were driven by higher-than-projected gas equivalent production and lower total costs and expenses. However, lower realizations of commodity prices partially offset the positives.

Operational Performance

The company’s production averaged 2,141.5 million cubic feet equivalent per day (Mcfe/d) in the reported quarter, almost in line with the prior-year period. The figure beat our projection of 2,121.6 Mcfe/d. Natural gas accounted for 68% of total production, while NGLs and oil contributed to the rest.

Oil production increased 5% year over year, while NGL output jumped 4%. Natural gas production, however, decreased 2% during the same time frame.

Total price realization (excluding derivative settlements and before third-party transportation costs) averaged $2.91 Mcfe, down 24% year over year. Notably, price realization was higher than our estimate of $2.74 Mcfe. Natural gas prices declined 38% on a year-over-year basis to $2.05 per Mcf. NGL prices declined 5%, while oil prices fell 3%.

Costs & Expenses

Total costs and expenses declined 8% year over year to $535 million. The reported figure was lower than our expectation of $571 million. Transportation, gathering, processing and compression costs, which form a major part of the total costs, increased to $290.9 million from $285.5 million in the prior-year quarter.

Capital Expenditure & Balance Sheet

The company’s drilling and completion expenditure amounted to $152 million in the reported quarter. An amount of $18 million was used for acreage, infrastructure and other investments.

RRC had a total long-term debt of $1,755.7 million at the end of the reported quarter.

Outlook

Range Resources forecasts its total production for 2024 in the range of 2.12-2.16 billion cubic feet equivalent per day, with more than 30% of this attributed to liquids production. RRC estimated a capital budget of $620-$670 million for the year.

How Have Estimates Been Moving Since Then?

Estimates revision followed a downward path over the past two months.

VGM Scores

Currently, Range Resources has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

Range Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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