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Why Is Range Resources (RRC) Up 5.7% Since Last Earnings Report?

It has been about a month since the last earnings report for Range Resources (RRC). Shares have added about 5.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Range Resources due for a pullback? 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 Q2 Earnings Beat Estimates

Range Resources posted second-quarter 2022 adjusted earnings of $1.27 per share, beating the Zacks Consensus Estimate of $1.21 per share. The bottom line significantly improved from the prior-year quarter’s earnings of 24 cents per share.

Total quarterly revenues of $1,225.1 million surpassed the Zacks Consensus Estimate of $981 million. The top line also improved from the prior-year quarter’s $434.7 million.

The strong quarterly results were driven by higher realizations of commodity prices.

Operational Performance

For second-quarter 2022, the company’s production averaged 2,073.9 million cubic feet equivalent per day, down 1% from the prior-year period. Natural gas contributed 69.8% to total production, while NGLs and oil accounted for the rest.

Oil production declined 8% from the year-ago period, while NGL output declined 4%. Natural gas production remained flat year over year.

Its total price realization (excluding derivative settlements and before third-party transportation costs) averaged $7.19 per thousand cubic feet equivalent (Mcfe), up 121% year over year. Natural gas prices rose 183% on a year-over-year basis to $6.91 per Mcf. NGL and oil prices increased 53% and 76%, respectively.

Costs & Expenses

Total costs and expenses rose to $669 million from $592.5 million in the year-ago quarter. Total transportation, gathering, processing and compression costs, as well as exploration costs, increased in the reported quarter.

Direct operating costs of 10 cents per Mcfe in the June-end quarter of 2022 remained flat from the year-ago quarter. Transportation, gathering, processing and compression expenses were recorded at $1.70 per Mcfe, higher than $1.48 in the prior-year quarter.

Capital Expenditure & Balance Sheet

In second-quarter 2022, the company’s drilling and completion expenditure was $119 million. An amount of $7.5 million was used in acreage and gathering facilities.

At the second-quarter end, it had total debt of $1,830.5 million, with a debt-to-capitalization of 48.1%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -10.56% due to these changes.

VGM Scores

At this time, Range Resources has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 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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