Penn Virginia Earnings:Here’s Why Investors are Selling Shares Now

Penn Virginia Corp. (NYSE:PVA) had a loss and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1.89%.

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Penn Virginia Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $-0.19 in the quarter versus EPS of $-0.15 in the year-earlier quarter.

Revenue: Decreased 1.43% to $83.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Penn Virginia Corp. reported adjusted EPS loss of $0.19 per share. By that measure, the company beat the mean analyst estimate of $-0.23. It beat the average revenue estimate of $82.16 million.

Quoting Management: H. Baird Whitehead, President and Chief Executive Officer stated, “In the first quarter, our operating cash flows and margins remained strong as a result of the continued growth in oil production and higher oil price realizations. We expect oil production to increase by nearly 70 percent in 2013 over 2012, comprising over 86 percent of product revenues and over 65 percent of production.
“In April, we closed the MHR Eagle Ford Shale acquisition and also completed a highly successful $775 million debt offering of 8.5 percent senior notes due 2020 to help finance this acquisition, as well as to repurchase our 10.375 percent senior notes due 2016. The MHR acquisition has significantly expanded our Eagle Ford Shale drilling inventory in a core area of the play and has positioned us for substantial growth over the next few years. Following these transactions, our balance sheet remains sound with approximately $280 million of pro forma financial liquidity and a pro forma leverage ratio of approximately 3.2 times Adjusted EBITDAX. Furthermore, we have increased the level of our crude oil hedges in 2013 and 2014 in conjunction with the MHR acquisition. We expect to fund our 2013 capital program from operating cash flows and borrowings under our revolver. We are also considering asset sales during 2013 and 2014 to further improve liquidity.”

Key Stats (on next page)…

Revenue increased 6.41% from $78.19 million in the previous quarter. EPS decreased to $-0.19 in the quarter versus EPS of $-0.22 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 $0.11 to a loss $0.17. For the current year, the average estimate has moved down from a loss of $0.4 to a loss of $0.59 over the last ninety days.

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