Magnum Hunter Resources Earnings: Here’s Why Investors are Not Happy Now

Magnum Hunter Resources Corporation (NYSE:MHR) had a loss and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 3.89%.

Magnum Hunter Resources Corporation Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $-0.18 in the quarter versus EPS of $-0.04 in the year-earlier quarter.

Revenue: Rose 39.3% to $84 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Magnum Hunter Resources Corporation reported adjusted EPS loss of $0.18 per share. By that measure, the company missed the mean analyst estimate of $-0.12. It missed the average revenue estimate of $92.16 million.

Quoting Management: Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter Resources, commented, “The production growth momentum we previously expressed to our shareholders is now becoming a reality. We reiterate today our projected production growth exit rate of 23,000 – 25,000 Boepd for year-end 2013. This projection excludes any new Utica wells located in Southeastern Ohio that are planned for completion prior to year-end. We are staying within our capital budget program having only spent approximately one-third of our annual budget through the first six months of the year. Our midstream subsidiary continues to hit record throughput volumes each month with current take-away north of 125,000 MMBtu per day. The Williston Basin division is now producing approximately 6,000 Boepd with a target of 7,000 Boepd by the end of the year. Non-core asset sales preparations are picking up speed with announcements of transactions anticipated in the near future. Our Appalachian land group has been continuing its efforts to grow our existing acreage position in the Utica/Marcellus plays as we see this region generating some of our highest rate of returns for new wells drilled, even during a sub-optimum natural gas and NGLs commodity price environment.”

Key Stats (on next page)…

Revenue decreased 14.32% from $98.04 million in the previous quarter. EPS increased to $-0.18 in the quarter versus EPS of $-0.06 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a loss of $0.08 to a loss $0.12. For the current year, the average estimate has moved down from a loss of $0.29 to a loss of $0.42 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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