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Hess (HES) Beats on Q1 Earnings, Ups 2023 Production Outlook

Hess Corporation HES has reported first-quarter 2023 earnings per share of $1.13, beating the Zacks Consensus Estimate of $1.03. However, the bottom line declined from the year-ago quarter’s $1.30 per share.

Total quarterly revenues increased to $2,453 million from $2,371 million a year ago. The top line missed the Zacks Consensus Estimate of $2,477 million.

Better-than-expected quarterly earnings have been driven by higher hydrocarbon production. The positives were partially offset by lower realizations of commodity prices.

Hess Corporation Price and EPS Surprise

 

Hess Corporation Price and EPS Surprise
Hess Corporation Price and EPS Surprise

Hess Corporation price-eps-surprise | Hess Corporation Quote

Operational Update

Exploration and Production:

For the quarter under review, the Exploration and Production business has reported adjusted earnings of $405 million, declining from $460 million a year ago. The business was negatively impacted by a decline in realized commodity prices.

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Quarterly hydrocarbon production was 374 thousand barrels of oil equivalent per day (MBoe/d), up from 297 MBoe/d in the year-ago period primarily due to higher production in Guyana and the Bakken.

Crude oil production increased from 151 thousand barrels per day (MBbls/d) in first-quarter 2022 to 216 MBbls/d in the quarter under review. Natural gas liquid production totaled 62 MBbls/d, up from 50 MBbls/d in the prior-year quarter. However, natural gas production was 574 thousand cubic feet per day (Mcf/d), down from 577 Mcf/d a year ago.

Worldwide crude oil realization per barrel of $76.02 (excluding the impacts of hedging) significantly declined from $94.04 in the year-ago period. Also, worldwide natural gas prices fell to $4.39 per Mcf from the year-ago figure of $5.28. The average worldwide natural gas liquids’ selling price declined to $24.25 per barrel from $39.79 a year ago.

Midstream:

From the midstream business, the company generated adjusted net earnings of $61 million, down from $72 million a year ago.

Operating Expenses

Operating expenses for the first quarter totaled $382 million versus the year-ago level of $313 million. Marketing costs declined to $603 million from $682 million a year ago. However, exploration expenses increased to $66 million from $43 million in the year-ago period.

Total costs and expenses increased to $1,849 million for the quarter from $1,669 million a year ago.

Financials

Net cash provided by operating activities was $638 million for the first quarter. Hess’ capital expenditure for exploration and production activities totaled $765 million.

As of Mar 31, 2023, the company had $2,100 million in cash and cash equivalents. Its long-term debt was $8,382 million at the first-quarter end.

Guidance

For 2023, Hess expects net production guidance (excluding Libya) of 365,000-375,000 barrels of oil equivalent per day (Boe/d), indicating an increase from the previously mentioned 355,000-365,000 Boe/d. The metric also suggests an increase from the 344,000 Boe/d reported in 2022.

Zacks Rank & Stocks to Consider

Hess currently carries a Zacks Rank #3 (Hold).

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

Sunoco LP SUN is scheduled to release first-quarter results on May 2. Valued at $4.5 billion, Sunoco has gained 8.3% in a year against the 3.4% decline of the composite stocks belonging to the industry.

Sunoco has an Earnings ESP of +5.66%. The Zacks Consensus Estimate for SUN’s earnings is pegged at $1.21 per share, suggesting a decline from the prior-year reported figure.

Cactus Inc. WHD is scheduled to release first-quarter results on May 9. Compared with composite stocks belonging to the industry, Cactus has significantly lower exposure to debt capital.

Cactus has an Earnings ESP of +1.79%. The Zacks Consensus Estimate for WHD’s earnings is pegged at 56 cents per share, suggesting an increase from the prior-year reported figure.

Marathon Petroleum Corporation MPC is scheduled to release earnings on May 2. Valued at around $55 billion, the company has gained 41.1% in a year compared with 9.6% growth of the composite stocks belonging to the industry.

Marathon Petroleum has seen an upward revision in earnings estimates for 2023 in the past seven days. The Zacks Consensus Estimate for MPC’s earnings is pegged at $5.44 per share, suggesting an increase from the prior-year reported figure.

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Hess Corporation (HES) : Free Stock Analysis Report

Sunoco LP (SUN) : Free Stock Analysis Report

Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report

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