Cabot Oil shares rise on 4Q results, production
NEW YORK (AP) — Shares of Cabot Oil & Gas Corp. rose Friday after the company reported fourth-quarter earnings that beat expectations on higher production.
THE SPARK: Cabot reported late Thursday that its net income was $40.9 million, or 19 cents per share, in the quarter that ended Dec. 31, compared with $26.4 million, or 13 cents per share, a year before.
The Houston-based company said that excluding losses from asset sales and expenses from stock-based compensation, it would have earned 27 cents per share.
Revenue rose to $369.9 million from $268 million a year ago.
Analysts surveyed by FactSet expected the company to earn an adjusted 21 cents a share on revenue of $349.5 million.
THE BIG PICTURE: The price that Cabot got for its natural gas slipped about 3 percent from a year earlier, but production soared 44 percent, to the equivalent of 78.8 billion cubic feet of gas. The company said it completed a record number of frac stages and brought on more infrastructure capacity in the quarter.
THE ANALYSIS: Stifel, Nicolaus & Co. analyst Amir Arif said the company's results from the Marcellus shale region in the Northeast "continue to set (Cabot) apart from its gas peers."
Arif added that the company's proved reserves of gas grew an "impressive" 27 percent. Reserves are seen as a precursor of future production for oil and gas companies.
Brean Capital analyst Raymond Deacon said Cabot had a strong quarter led by higher production, and that initial results for extended lateral wells in the Marmaton field of the Great Plains "also look encouraging." The company continues to plan for a 2013 capital budget of about $1 billion and production growth of 35 to 50 percent, he said.
SHARE ACTION: The shares were up $5.50, or 10.2 percent, to $59.36 in afternoon trading. Earlier in the session, they hit a 52-week high of $59.55. The stock is up about 70 percent in the past year.