posted strong gains in second-quarter revenue, earnings and cash flow, though the energy company missed Wall Street estimates for operating earnings.
For its second quarter ended June 30, the Calgary-based oil and natural gas producer earned $786 million, or 88 cents a share, from continuing operations. That's up from the year-ago $265 million, or 28 cents a share. Revenue jumped to $3.58 billion from $2.55 billion a year earlier, and cash flow surged 45% from a year ago to $1.5 billion.
The company said latest-quarter operating earnings rose 78% from a year ago to 73 cents a share, leaving them 6 cents shy of the Thomson First Call analyst consensus estimate. The company cited rising costs and delays in bringing natural gas wells on stream, due to "the shorter than usual winter operating season, wet spring conditions in many operating areas, and shortages of industry services."
Noting the rise in costs, EnCana said, "EnCana's costs are about 10 percent higher than we had forecasted when we established our budgets last fall. While some cost increases are due to execution delays caused by weather, they are primarily driven by higher service sector pricing, higher steel pricing and the overall shortage of completion services -- all three directly related to the robust commodity price environment we are currently benefiting from. In our effort to continually find ways to manage costs, we have reached a number of long-term arrangements with established drilling companies to supply 27 additional rigs, many built new to fit EnCana's purpose and utilizing the latest technology. These will expand the industry's overall fleet and should help EnCana mitigate the inflationary impact of high industry activity levels by reducing drilling days on its large suite of North American resource plays."
Early Thursday, EnCana was at $42.14.