A month has gone by since the last earnings report for Hess (HES). Shares have added about 0.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hess due for a pullback? 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 drivers.
Hess Corporation reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.76, which beat the Zacks Consensus Estimate of $1.51. The bottom line was flat year over year.
Total quarterly revenues increased to $3,225 million from $3,035 million in the year-ago period. The top line also beat the Zacks Consensus Estimate of $3,032 million.
The better-than-expected quarterly earnings can be attributed to higher oil equivalent production volumes and decreased costs. This was partially offset by lower crude and natural gas price realization.
The Exploration and Production business reported adjusted earnings of $529 million, down from $531 million a year ago. The business was affected by a decrease in realized crude and natural gas prices.
Quarterly hydrocarbon production totaled 495 thousand barrels of oil equivalent per day (MBoe/d), up from 418 MBoe/d in the year-ago period, primarily due to higher production in Guyana and Bakken. The reported figure also beat our estimate of 479.3 MBoe/d.
Crude oil production increased from 244 thousand barrels per day (MBbls/d) in the fourth quarter of 2023 to 315 MBbls/d at the end of the reported quarter. The figure also beat our estimate of 303.6 MBbls/d.
NGL production totaled 79 MBbls/d, up from 73 MBbls/d in the prior-year quarter. The reported figure beat our estimate of 74.9 MBbls/d.
Natural gas production totaled 607 thousand cubic feet per day (Mcf/d), down from 608 Mcf/d a year ago. The reported figure was higher than our estimate of 604.7 Mcf/d.
Worldwide crude oil realization per barrel of $72.10 (excluding the impacts of hedging) decreased from $78.95 in the year-ago period. Also, the global natural gas price declined to $4.10 per Mcf from the year-ago figure of $4.51. The average global NGL selling price increased to $23.05 per barrel from $20.92 a year ago.
The company generated adjusted net earnings of $74 million, up from $63 million a year ago.
Operating expenses for the fourth quarter totaled $532 million compared with the year-ago level of $473 million. The reported figure exceeded our projection of $474 million.
Exploration expenses increased to $139 million from $87 million recorded in the year-ago period. Marketing costs decreased to $653 million from $886 million a year ago.
Total costs and expenses decreased to $2,297 million from $2,350 million in the prior-year period.
Net cash provided by operating activities amounted to $1,312 million. Hess’ capital expenditure for exploration and production activities totaled $1,677 million.
As of Dec. 31, 2024, the company had $1,171 million in cash and cash equivalents. Its long-term debt was $8,555 million at the end of the fourth quarter.
For the first quarter of 2025, Hess expects exploration and production net production of 465-475 thousand barrels of oil equivalent per day. The company forecasts a total exploration and production capital and exploratory expenditure of $4.5 billion for full-year 2025.
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 9.52% due to these changes.
Currently, Hess has a nice Growth Score of B, a grade with the same score on the momentum front. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hess has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
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