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TheStreet Open House

Cabot Oil & Gas (COG) Falls Despite Earnings Beat

NEW YORK (TheStreet) -- Cabot Oil & Gas (COG) was falling 5.7% to $37.04 on Friday despite fourth-quarter results that beat analysts' estimates.

The oil and gas producer reported a 91% increase in profit for the quarter, and earnings of 19 cents a share, up from 10 cents a share in the year-ago quarter. Analysts surveyed by Thomson Reuters expected earnings of 18 cents a share. Revenue rose 32% to $487.5 million in the quarter, beating analysts' estimates of $476 million.

Natural gas production rose 56% in the quarter, though average prices decreased 12% from the year-ago period. Oil, condensate, and natural gas liquids output increased by 34% while average prices declined 9.3%.

Must read: 5 Stocks Advancing The Energy Industry

TheStreet Ratings team rates CABOT OIL & GAS CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about its recommendation:

"We rate CABOT OIL & GAS CORP (COG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 46.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CABOT OIL & GAS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CABOT OIL & GAS CORP increased its bottom line by earning $0.31 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.70 versus $0.31).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 90.9% when compared to the same quarter one year prior, rising from $36.61 million to $69.89 million.
  • The gross profit margin for CABOT OIL & GAS CORP is currently very high, coming in at 74.49%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.03% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 68.75% to $276.71 million when compared to the same quarter last year. In addition, CABOT OIL & GAS CORP has also vastly surpassed the industry average cash flow growth rate of -50.31%.

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