Update: Cabot Oil & Gas Earnings

Jul.24.14 | About: Cabot Oil (COG)


Cabot reported its Q2 earnings which beat the street's estimates by $0.03.

This news confirms my long position in the stock.

While it didn't make specific quarterly estimates my original article was correct in predicting that company would have solid earnings momentum in the future.

Cabot Oil and Gas (NYSE:COG) reported Q2 earnings of $0.28 per share which was $0.03 better that the analyst's estimates. The firm reported $533.18 million in revenues compared to the consensus estimate of $517.57 million. Cabot produced 121.8 billion feet equivalent of natural gas which is 34% higher than last year's Q2 production level. It produced 961,000 barrels of liquids (crude oil/ condensate/ natural gas liquids) which is an increase of 25% over last year's production and a 65% increase pro forma for Mid-Continent and West Texas asset sales. Net income was $115.3 million. This was an increase of 21% from the comparable quarter last year. Total unit costs increased by 16% from last year to $2.59 per thousand cubic feet equivalent.

Total liquids volume increased by 40% sequentially due to strong production in the Eagle Ford shale. Cash flow from operations was $329.6 million compared to Q2 2013 having $277.3 million in cash flow. The earnings of $0.28 per share were up from $0.21 per share in Q2 2013.

In my original article "Cabot: 122 Miles of Profit" I described how the Constitution pipeline will be a huge boon for the company's bottom line in 2016. This thesis is still intact. The stock price has not changed since I wrote the article, which isn't surprising since I wrote it only 2 weeks ago. I am still long the company's stock for the long-term and encourage readers to buy it as it is very attractively valued at its current price.

Disclosure: The author is long COG. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.