EOG Resources Earnings: Exceeds Estimates Despite Falling Profit

Although S&P 500 (NYSE:SPY) component EOG Resources Inc.’s (NYSE:EOG) net income fell in the third quarter from a year earlier, profit exceeded analysts’ expectations. EOG Resources develops and produces natural gas and crude oil primarily in the United States, Canada, the Republic of Trinidad, Tobago, and the United Kingdom.

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EOG Resources Inc. Earnings Cheat Sheet

Results: Net income for the oil-US export and production fell to $355.5 million ($1.31 per share) vs. $540.9 million ($2.01 per share) a year earlier. This is a decline of 34.3% from the year-earlier quarter.

Revenue: Rose 2.4% to $2.95 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: EOG Resources Inc. reported adjusted net income of $1.73 per share. By that measure, the company beat the mean estimate of $1.12 per share. It beat the average revenue estimate of $2.36 billion.

Quoting Management: “With especially strong, consistent individual well results, EOG’s best plays have become even better,” said Mark G. Papa, Chairman and Chief Executive Officer. “Therefore, based on nine months of robust crude oil production, we are setting the bar higher for the third time this year. EOG has increased its 2012 crude oil production growth target to 40 percent from 37 percent. Because our outstanding oil results also impact total liquids production, we are also raising our total liquids production growth target to 38 percent from 35 percent and increasing our total company production target to 10.6 percent from nine percent.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 13.2% to $2.91 billion in the second quarter. The figure rose 47.9% in the first quarter from the year earlier and climbed 55% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of $1.16 versus a mean estimate of net income of 92 cents per share.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from $1.09 a share to $1.23 over the last ninety days. The average estimate for the fiscal year is $4.75 per share, a rise from $4.36 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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