SM Energy Company (SM) on Q4 2022 Results - Earnings Call Transcript
Operator: Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the SM Energy Fourth Quarter 2022 Results and 2023 Planned Q&A Discussion. All lines have been placed on mute to prevent any background noise. After the speakers brief remarks there will be a question and answer session. Thank you. Jennifer Samuels, Vice President, Investor Relations and ESG Stewardship, you may begin your conference. Jennifer Samuels: Thanks, Rob. Good morning, everyone. We come to you this morning from a chilly Denver, it just warmed up to minus 2 degrees. Thank you for joining us today to answer your questions. We have our President and CEO, Herb Vogel, and CFO, Wade Pursell. As usual, before we get started, I will remind you that our discussion today may include forward-looking statements and discussion of non-GAAP measures. I direct you to Slide 2 of the accompanying slide deck, Page 8 of the accompanying earnings release and Risk Factors section of our most recently filed 10-K, which describe risks associated with forward-looking statements that could cause actual results to differ. We may also refer to non-GAAP measures, please see the slide deck appendix and earnings release for definitions and reconciliations of non-GAAP measures to the most directly comparable GAAP measures and discussion of forward-looking non-GAAP measures. As a reminder, we have posted to our website an investor presentation and the transcript to our prerecorded call that we may reference today and also look for our 2022 annual report filed on Form 10-K this morning. With that, I will turn it back to Rob to open it up for questions. Rob? Operator: And we have our first question from the line of Zach Parham from JPMorgan. Your line is open. Zach Parham: I guess, first off, you started buying back stock a couple of quarters ago. You ended -- you've met your balance sheet goals and exited the year with almost $450 million in cash on the balance sheet. Can you just talk a little bit about your plans for cash return going forward and what your plans are for allocating that cash balance? Wade Pursell: This is Wade. Yes, good question. We -- I think we mentioned in our remarks that we're very pleased to continue with the return of capital program, which we were happy to announce last year as we met our leverage targets, and we feel that's a very sustainable program, and we even reminded everyone that we ran that at $60 and $3 so the dividend, obviously, that will continue to be paid in the $500 million that we committed to on the stock buyback and we said through 2024, we'll continue that program. And it will be methodical. People like to ask, how do you -- how are we going to write that and we're saying the same thing we said before that it will just be a methodical buyback, we will support the stock looking at it on a daily basis. As far as anything beyond that, that will -- obviously, that will have a lot to do with commodity price and the level of free cash flow that we generate and there's clearly some upside to that given the fact that we stated that we ran it at $60 and $3. And beyond that, we'll just monitor conditions going forward. We did mention at one time that -- and we still believe it that running the balance sheet in a -- kind of in a one-in-one area is a prudent place to be. So the -- one of the reasons that cash is so high is because that's -- it's a net debt number. So at some point, we could reduce absolute debt. We could do that any time, a lot of flexibility with those bonds. But for now, there's a lot of uncertainty as we enter '23. So it just feels prudent to have some cash on the balance sheet and just kind of monitor things and how they develop. Zach Parham: And then for my follow-up, just wanted to ask on LOE. The guidance for the year was up pretty significantly, a little higher than we were modeling. I know you mentioned workovers in there, but can you just talk about the drivers of LOE moving higher year-over-year? Herb Vogel: Yes. Zach, this is Herb. Yes, the capital inflation last year was much stronger than the operating cost inflation, but there are certain cost areas that went up not, but workovers increase is probably the single biggest. Then we've got water and just general inflation. So that's really the contributors there. Labor is also up and we've got that integrated in that estimate also both of those are really the major components. The good news is diesel is way down and that will play into capital and operating expense on a downward trajectory right now. Operator: And your next question comes from the line of Alisa Dong from Bloomberg. It just disconnected. I'm sorry. And we have no further questions at this time. I'm going to turn it back to Herb Vogel -- Oh I'm -- yes, to Herb Vogel for some final closing comments. Herb Vogel: Okay. Well, thank you for joining the call and your interest in SM Energy, and we're looking forward to an outstanding 2023. Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
SM Energy (NYSE:SM) Quarterly Earnings Preview
- SM Energy is set to release its quarterly earnings on May 1, 2025, with an expected EPS of $1.57 and revenue of approximately $819.8 million.
- The company's valuation is highlighted by a P/E ratio of 3.47 and a price-to-sales ratio of 1, indicating a potentially attractive investment opportunity.
- Concerns regarding liquidity are noted with a current ratio of 0.55, suggesting potential challenges in meeting short-term obligations.
SM Energy (NYSE:SM) is preparing to release its quarterly earnings on May 1, 2025. Analysts predict an earnings per share (EPS) of $1.57, with revenue expected to reach approximately $819.8 million. SM Energy is a company involved in the exploration and production of oil and natural gas, competing with other energy firms in the industry.
The anticipated year-over-year increase in earnings for SM is driven by higher revenues for the quarter ending March 2025. This positive outlook is supported by the consensus, which suggests a favorable earnings picture. However, the actual results compared to these estimates will play a crucial role in influencing the stock's near-term price movement.
SM's financial metrics provide insight into its valuation. The company has a price-to-earnings (P/E) ratio of 3.47, indicating a relatively low valuation compared to its earnings. Additionally, the price-to-sales ratio is about 1, suggesting that its market value is nearly equal to its sales. These figures highlight the company's current market position.
The enterprise value to sales ratio of 2.01 and the enterprise value to operating cash flow ratio of 3.01 reflect SM's valuation in relation to its cash flow. The earnings yield of 28.86% measures the return on investment for shareholders, indicating a potentially attractive investment opportunity. However, the debt-to-equity ratio of 0.64 shows a moderate level of debt compared to equity.
Despite these positive indicators, SM's current ratio of 0.55 suggests potential liquidity concerns, as it is below the standard threshold of 1. This means the company may face challenges in meeting its short-term obligations. The management's discussion during the earnings call will be crucial in determining the sustainability of any immediate price changes and future earnings expectations.
SM Energy (NYSE:SM) Quarterly Earnings Preview
- SM Energy is set to release its quarterly earnings on May 1, 2025, with an expected EPS of $1.57 and revenue of approximately $819.8 million.
- The company's valuation is highlighted by a P/E ratio of 3.47 and a price-to-sales ratio of 1, indicating a potentially attractive investment opportunity.
- Concerns regarding liquidity are noted with a current ratio of 0.55, suggesting potential challenges in meeting short-term obligations.
SM Energy (NYSE:SM) is preparing to release its quarterly earnings on May 1, 2025. Analysts predict an earnings per share (EPS) of $1.57, with revenue expected to reach approximately $819.8 million. SM Energy is a company involved in the exploration and production of oil and natural gas, competing with other energy firms in the industry.
The anticipated year-over-year increase in earnings for SM is driven by higher revenues for the quarter ending March 2025. This positive outlook is supported by the consensus, which suggests a favorable earnings picture. However, the actual results compared to these estimates will play a crucial role in influencing the stock's near-term price movement.
SM's financial metrics provide insight into its valuation. The company has a price-to-earnings (P/E) ratio of 3.47, indicating a relatively low valuation compared to its earnings. Additionally, the price-to-sales ratio is about 1, suggesting that its market value is nearly equal to its sales. These figures highlight the company's current market position.
The enterprise value to sales ratio of 2.01 and the enterprise value to operating cash flow ratio of 3.01 reflect SM's valuation in relation to its cash flow. The earnings yield of 28.86% measures the return on investment for shareholders, indicating a potentially attractive investment opportunity. However, the debt-to-equity ratio of 0.64 shows a moderate level of debt compared to equity.
Despite these positive indicators, SM's current ratio of 0.55 suggests potential liquidity concerns, as it is below the standard threshold of 1. This means the company may face challenges in meeting its short-term obligations. The management's discussion during the earnings call will be crucial in determining the sustainability of any immediate price changes and future earnings expectations.
SM Energy Company (NYSE:SM) Stock Price Target Trends and Earnings Expectations
- The consensus price target for SM Energy Company (NYSE:SM) has gradually decreased over the past year, indicating analysts' adjusted expectations.
- Analysts predict a decline in earnings for SM Energy in its upcoming report, influencing target price adjustments.
- Investors should consider various factors, including target price trends, company news, and industry developments, to make informed decisions.
SM Energy Company (NYSE:SM), based in Denver, Colorado, is an independent energy company that focuses on the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids. The company operates primarily in Texas, with a significant presence in the Midland Basin and South Texas. Over the past year, SM Energy's stock has experienced fluctuations in its consensus target price, reflecting changes in market conditions and company performance.
The consensus price target for SM Energy's stock has shown a gradual decrease over the past year. Last month, the average price target was $51.5, down from $53 in the previous quarter, and $55.09 a year ago. This trend suggests that analysts have adjusted their expectations, possibly due to various factors affecting the energy sector. As highlighted by Zacks, analysts are predicting a decline in earnings for SM Energy in its upcoming report, which may have influenced these target price adjustments.
John Gerdes from MKM Partners has set a price target of $52 for SM Energy, indicating a cautious outlook. Investors should be aware of the key expectations surrounding the company's upcoming earnings report. SM Energy plans to release its third quarter 2024 financial and operating results after market hours on October 31, 2024. The release will include an earnings report, a pre-recorded webcast discussing the results, and an associated presentation, all of which will be available on the company's website.
Investors interested in SM Energy should consider these target price trends alongside other factors, such as recent company news, earnings reports, and industry developments, to make informed decisions. The anticipated decline in earnings, as noted by Zacks, may impact investor sentiment and influence future price targets. Keeping an eye on the company's performance and market conditions will be crucial for those looking to invest in SM Energy.
SM Energy Company (NYSE:SM) Stock Price Target Trends and Earnings Expectations
- The consensus price target for SM Energy Company (NYSE:SM) has gradually decreased over the past year, indicating analysts' adjusted expectations.
- Analysts predict a decline in earnings for SM Energy in its upcoming report, influencing target price adjustments.
- Investors should consider various factors, including target price trends, company news, and industry developments, to make informed decisions.
SM Energy Company (NYSE:SM), based in Denver, Colorado, is an independent energy company that focuses on the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids. The company operates primarily in Texas, with a significant presence in the Midland Basin and South Texas. Over the past year, SM Energy's stock has experienced fluctuations in its consensus target price, reflecting changes in market conditions and company performance.
The consensus price target for SM Energy's stock has shown a gradual decrease over the past year. Last month, the average price target was $51.5, down from $53 in the previous quarter, and $55.09 a year ago. This trend suggests that analysts have adjusted their expectations, possibly due to various factors affecting the energy sector. As highlighted by Zacks, analysts are predicting a decline in earnings for SM Energy in its upcoming report, which may have influenced these target price adjustments.
John Gerdes from MKM Partners has set a price target of $52 for SM Energy, indicating a cautious outlook. Investors should be aware of the key expectations surrounding the company's upcoming earnings report. SM Energy plans to release its third quarter 2024 financial and operating results after market hours on October 31, 2024. The release will include an earnings report, a pre-recorded webcast discussing the results, and an associated presentation, all of which will be available on the company's website.
Investors interested in SM Energy should consider these target price trends alongside other factors, such as recent company news, earnings reports, and industry developments, to make informed decisions. The anticipated decline in earnings, as noted by Zacks, may impact investor sentiment and influence future price targets. Keeping an eye on the company's performance and market conditions will be crucial for those looking to invest in SM Energy.
SM Energy Reports Q1 EPS Beat But Revenues Lower Than Expected
SM Energy (NYSE:SM) reported its Q1 results, with EPS of $1.62 beating the Street estimate of $1.28. Revenue was $573.5 million, coming in worse than the Street estimate of $584.7 million.
Production outperformance in Q1 was largely related to improved well performance and bringing on 7 new wells a week early.
The strong performance from the South Texas wells and a good base decline on PDP wells bode well for free cash flow in 2023. Operational efficiency is also improving with faster drilling times resulting from co-development.
SM Energy Reports Q1 EPS Beat But Revenues Lower Than Expected
SM Energy (NYSE:SM) reported its Q1 results, with EPS of $1.62 beating the Street estimate of $1.28. Revenue was $573.5 million, coming in worse than the Street estimate of $584.7 million.
Production outperformance in Q1 was largely related to improved well performance and bringing on 7 new wells a week early.
The strong performance from the South Texas wells and a good base decline on PDP wells bode well for free cash flow in 2023. Operational efficiency is also improving with faster drilling times resulting from co-development.
