Concho Resources (CXO) Misses Q4 EPS by 19c

Concho Resources (NYSE: CXO) reported Q4 EPS of $0.94, $0.19 worse than the analyst estimate of $1.13. Revenue for the quarter came in at $1.07 billion versus the consensus estimate of $1.19 billion.

Outlook

Concho’s updated outlook for 2019 reinforces the Company’s commitment to generating shareholder value at all points in the cycle. Capital spending for 2019 is expected to be between $2.8 billion and $3.0 billion, representing a 17% reduction at the midpoint compared with the Company’s prior capital guidance. Additionally, the Company’s base plans for 2020 entail maintaining a consistent level of investment compared with 2019. Prioritizing capital discipline and moderating activity enhances Concho’s free cash flow outlook, capital efficiency and financial flexibility.

Approximately 94% of the 2019 capital program will be allocated to drilling and completion operations. The Company’s activity will be primarily focused on large-scale manufacturing projects across Concho’s portfolio and will keep the Company on track to deliver the value creation benefits of the RSP Permian, Inc. (“RSP”) acquisition. Concho’s planned activity for 2019 is expected to deliver oil growth of 26% to 30%, and the base plan for 2020 is expected to drive a two-year oil compound annual growth rate of 23% (from 2018 to 2020).

For first-quarter 2019, Concho expects production to average between 300 MBoepd and 306 MBoepd, and lease operating expense per Boe to average between $6.30 and $6.50. Additionally, Concho expects capital expenditures to total between $825 million and $875 million.

Detailed guidance for 2019 is provided under “2019 Guidance” below. The Company’s outlook for 2019 and 2020 excludes acquisitions and is subject to change without notice depending upon a number of factors, including commodity prices, industry conditions and other risks described under “Forward-Looking Statements and Cautionary Statements.”

For earnings history and earnings-related data on Concho Resources (CXO) click here.

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