October 27, 2010
Hess Corp. (
HES ) reported better-than-expected third-quarter earnings of $1.31 per share, compared with the Zacks Consensus Estimate of $1.04 and the year-earlier profit of 74 cents. We have adjusted the reported quarter as well as the year-earlier figures for the non-recurring items.
Total revenue increased 21% year over year to $8.95 billion, but remained well below the Zacks Consensus Estimate of $10.33 billion.
Operational Performance
The
Exploration and Production (E&P) segment posted $1,277 million profit in the quarter, substantially higher than the year-earlier profit of $397 million. Results were positively impacted by a significant increase in oil and gas prices.
Quarterly oil and gas production was 413 thousand barrels of oil equivalent per day (MBOE/d), down almost 2% year over year. Crude oil production was 290 thousands barrels per day (down from 297 barrels per day in the year-ago quarter), natural gas liquids accounted for 18 barrels (up from 14 barrels) and natural gas was 630 thousand cubic feet (Mcf) (down from 654 Mcf).
Worldwide crude oil realization per barrel during the quarter was $64.81 (including the impact of hedging), up by more than 15% year over year. Worldwide natural gas prices (including the impact of hedging) increased more than 24% year over year to $5.73 per Mcf.
The
Marketing and Refining segment posted a loss of $38 million, compared with income of $38 million in the year-earlier quarter. The reported quarter incurred losses of $50 million from refinery operations compared with $3 million in the year-ago quarter as a result of lower refining margins.
Quarterly net cash flow from operations was $1,246 million. Hess’ capital expenditures totaled $1,567 million in the third quarter, of which approximately $1,548 million went into the E&P business. At the end of the quarter, the company had approximately $2.35 billion in cash and $5.58 billion in long-term debt. Hess’ debt-to-capitalization ratio at the end of the quarter stood at 26.0%.
Outlook
We continue to see an upstream momentum on the back of the company's large inventory of E&P projects. Hess’ improving fundamentals, commodity price leverage and exposure to areas with high resource potential have improved its prospects
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Hess Tops Substantially - Zacks.com
Thu October 28, 2010 11:15 am
J.P. Morgan is slightly increasing its Hess Corporation (NYSE:
HES) 4Q10E EPS to $1.37/sh on several minor changes in modeling assumptions.
Incorporating actual 3Q10 results, we now model full-year 2010E EPS of $5.29/sh, up from $5.05/sh, J.P. Morgan writes. Our new 2011E EPS is $6.40/sh, down from our prior estimate of $6.56/sh based on our modeling a slightly higher exploration expense. With HES offering 20% potential upside to our year-end 2011 price target of $75/sh, we reiterate our Overweight rating.
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J.P. Morgan Makes Slight Increase To Hess Corporation 4Q10E EPS -- Seeking Alpha
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