Denbury Resources Inc. Earnings Cheat Sheet: Beats Forecasts

S&P 500 (NYSE:SPY) component Denbury Resources Inc. (NYSE:DNR) reported net income above Wall Street’s expectations for the third quarter. Denbury Resources is an independent oil and gas company that acquires and develops oil and natural gas properties in the United States Gulf Coast region.

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Denbury Resources Earnings Cheat Sheet for the Third Quarter

Results: Net income for the independent oil and gas company rose to $275.7 million (68 cents per share) vs. $29.1 million (7 cents per share) in the same quarter a year earlier. This marks a substantial increase from the year earlier quarter.

Revenue: Rose 23.9% to $576.5 million from the year earlier quarter.

Actual vs. Wall St. Expectations: DNR reported adjusted net income of 37 cents per share. By that measure, the company beat the mean estimate of 29 cents per share. It beat the average revenue estimate of $550.5 million.

Quoting Management: Phil Rykhoek, Chief Executive Officer, said, “We are pleased to report another record quarterly cash flow from operations, even though average NYMEX oil prices declined approximately $13 per barrel between the second and third quarters. We were able to do so in part because we sell more than 60% of our oil based on indexes other than NYMEX WTI, increasing our overall NYMEX differential to $7.25 per barrel above NYMEX this quarter, primarily as a result of the high LLS differential. Our net oil price as compared to NYMEX price has improved more than $11 a barrel from a year ago, making a significant impact on our bottom line. Further, we had a modest increase in production and modest savings in most of our expenses, all contributing to the record quarter. In the third quarter, we continued to increase our net asset value with the addition of over 50 MMBOE of proved reserves, a 12% increase over the estimates at June 30, 2011. With our share repurchase program, we have improved all of our per share metrics by nearly 3% with the purchase of approximately 11 million shares in the last few weeks, all purchased at prices below the per share net asset value of our proved reserves at current prices.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 59.4%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose more than twofold from the year earlier quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 36 cents versus a mean estimate of net income of 33 cents per share.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the fourth quarter is 28 cents per share, a drop from 31 cents. The average estimate for the fiscal year is now $1.18 per share, down from $1.23 sixty days ago.

Competitors to Watch: QR Energy LP (NYSE:QRE), Swift Energy Company (NYSE:SFY), Carrizo Oil & Gas, Inc. (NASDAQ:CRZO), Crimson Exploration Inc. (NASDAQ:CXPO), South Texas Oil Company (STXXQ), GeoMet, Inc. (NASDAQ:GMET), Penn Virginia Corporation (NYSE:PVA), Evolution Petroleum Corp. (AMEX:EPM), Constellation Energy Partners LLC (NYSE:CEP), and Lucas Energy, Inc. (AMEX:LEI).

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(Source: Xignite Financials)

 

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