| Will Range Resources (RRC) Disappoint Earnings in Q2? - Analyst Blog | |
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Range Resources Corporation RRC is expected to report second-quarter 2015 earnings on Jul 28, 2015, after the market closes.
Last quarter, this independent oil and gas company, posted earnings of 12 cents per share that comfortably beat the Zacks Consensus Estimate of 4 cents. The improvement was mainly backed by significantly higher production, primarily in the Marcellus shale region.
The bottom line, however, decreased from the year-earlier profit of 46 cents per share. Let’s see how things are shaping up prior to this announcement.
Factors Likely to Affect Earnings
Range Resources’ diversified asset portfolio is spread between low-risk/long reserve life Appalachian assets and large-volume/rapid-payout Gulf Coast properties. The company has an impressive inventory in the Marcellus Shale – one of the prominent emerging shale plays in the U.S. lower 48. The company is advantageously positioned to benefit in the long run from these projects.
Given its dominant position in the Marcellus Shale play and its continuous endeavor to control costs, we believe that Range Resources will be capable of long-term shareholder value creation. This, in turn, is likely to enhance earnings during the second quarter.
For 2015, the company targets production growth of 20% year over year, while second-quarter output is anticipated at 1.345 Bcfe per day. Also, Range Resources has decided to slash its capital budget by 46% (to $870 million), as it focuses on controlling costs amid plummeting crude realizations.
However, with the majority of Range Resources’ reserves depending on natural gas, the company’s earnings are vulnerable to fluctuations in the natural gas markets. Earlier, the weak gas price environment had compelled the company to reduce its exposure to natural gas drilling.
Earnings Whispers
Our proven model does not conclusively show that Range Resources is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: Earnings ESP for Range Resources is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a negative 6 cents.
Zacks Rank: Range Resources carries a Zacks Rank #4 (Sell). We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the same space which, according to our model, that have the right combination of elements to post an earnings beat this quarter: - Marathon Petroleum Corp. MPC has Earnings ESP of +1.12% and a Zacks Rank #2 (Buy)
- Suncor Energy Inc. SU has an Earnings ESP of +45.46% and a Zacks Rank #3 (Hold)
- Hess Corp. HES has an Earnings ESP of +5.48% and a Zacks Rank #3
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RANGE RESOURCES (RRC): Free Stock Analysis Report HESS CORP (HES): Free Stock Analysis Report SUNCOR ENERGY (SU): Free Stock Analysis Report MARATHON PETROL (MPC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Range Resources Ltd
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EXPLORATION STAGE |
CODE : RRS.AX |
ISIN : AU000000RRS3 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Range Res. is a gold exploration company based in Australia. Range Res. holds various exploration projects in Australia. Its main exploration properties are CORACHAPI in Peru and DONNYBROOK in Australia. Range Res. is listed in Australia and in Germany. Its market capitalisation is AU$ 7.6 millions as of today (US$ 5.2 millions, € 4.7 millions). Its stock quote reached its highest recent level on March 11, 2011 at AU$ 0.38, and its lowest recent point on November 22, 2019 at AU$ 0.00. Range Res. has 7 595 830 272 shares outstanding. |