On Friday, Shares of Cabot Oil & Gas Corporation (NYSE: COG) gained 1.07% to $27.36. The stock grabbed the investor's attention and traded 2,339,315 shares as compared to its average daily volume of 5.68M shares.
Cabot Oil & Gas Corporation (COG) recently declared the best year of its nearly three-decade public company history that offered record financial results, the culmination and in-service of several long-dated infrastructure programs, and continued momentum on the free cash flow front.
Fourth-Quarter 2018 Financial Results:
Fourth-quarter 2018 daily equivalent production was 2,243.0M cubic feet equivalent (Mmcfe) per day (100 percent natural gas), a 20 percent increase relative to the fourth-quarter of 2017 and an 11 percent sequential increase relative to the third-quarter of 2018. On a divestiture-adjusted basis, fourth-quarter 2018 daily equivalent production increased 26 percent relative to the prior-year comparable quarter.
Fourth-quarter 2018 net income was $275.00M, or $0.64 per share, contrast to net loss of $44.40M, or $0.10 per share, in the prior-year period. Fourth-quarter 2018 adjusted net income (non-GAAP) was $235.80M, or $0.55 per share, contrast to adjusted net income of $59.50M, or $0.13 per share, in the prior-year period. Fourth-quarter 2018 EBITDAX (non-GAAP) was $463.10M, contrast to $259.80M in the prior-year period.
Fourth-quarter 2018 net cash offered by operating activities was $316.10M, contrast to $179.10M in the prior-year period. Fourth-quarter 2018 discretionary cash flow (non-GAAP) was $492.80M, contrast to $240.10M in the prior-year period. Fourth-quarter 2018 free cash flow (non-GAAP) was $241.40M, contrast to $28.70M in the prior-year period. "Our free cash flow for the fourth-quarter exceeded our initial forecast of $200.0M, driven by stronger than anticipated price realizations," commented Dinges.
Cabot incurred a total of $223.00M of capital expenditures in the fourth-quarter of 2018 counting $207.60M of drilling and facilities capital; $2.40M of leasehold acquisition capital; and $13.00M of other capital. Moreover, the Company contributed $4.40M to its equity method pipeline investments in the fourth-quarter of 2018. See the supplemental table at the end of this press release reconciling the capital expenditures during the fourth-quarter of 2018.
Full-Year 2018 Financial Results:
Full-year 2018 net income was $557.00M, or $1.25 per share, contrast to net income of $100.40M, or $0.22 per share in the prior-year period. Adjusted net income (non-GAAP) was $531.20M, or $1.19 per share, contrast to adjusted net income of $244.50M, or $0.53 per share, in the prior-year period. Full-year 2018 EBITDAX (non-GAAP) was $1.30B, contrast to $1.10B in the prior-year period.
Full-year 2018 net cash offered by operating activities was $1,104.90M, contrast to $898.20M in the prior-year period. Full-year 2018 discretionary cash flow (non-GAAP) was $1,268.40M, contrast to $976.10M in the prior-year period. Full-year 2018 free cash flow (non-GAAP) was $296.60M, contrast to $154.50M in the prior-year period. Full-year 2018 ROCE (non-GAAP) improved to 15.9 percent, contrast to 7.3 percent in the prior-year period.
Cabot incurred a total of $816.10M of capital expenditures in 2018 counting $758.90M of drilling and facilities capital; $29.90M of leasehold acquisition capital; and $27.30M of other capital. In Addition To, the Company contributed $77.30M to its equity method pipeline investments in 2018. See the supplemental table at the end of this press release reconciling the capital expenditures for the year.
Capital Allocation Update:
During the fourth-quarter of 2018, Cabot repurchased 11.30M shares at a weighted-average share price of $22.92, resulting in full-year 2018 repurchases of about 38.50M shares at a weighted-average share price of $23.48. Since reactivating the share repurchase program in the second-quarter of 2017, Cabot has reduced its shares outstanding by over nine percent to 423.40M shares. "During the year, we returned about $1.00B of capital to shareholders via dividends and share repurchases, representing a total shareholder yield of over nine percent based on our current market capitalization," said Dinges. "We expect to continue to be an industry leader in shareholder yield as we execute on our strategy of returning at least 50 percent of free cash flow to shareholders annually."
Financial Position and Liquidity:
As of December 31, 2018, Cabot had total debt of $1.20B and cash on hand of $2.30M. During the fourth-quarter of 2018, Cabot paid off its $67.00M tranche of 9.78% senior notes that matured on December 1, 2018. For the full-year, the Company stepped$304.0M of senior notes that matured in 2018, resulting in annualized interest expense savings of $21.80M.
COG has a market value of $11.31B while its EPS was booked as $1.23 in the last 12 months. The stock has 417.70M shares outstanding. In the profitability analysis, the company has gross profit margin of 65.70% while net profit margin was 25.50%. Beta value of the company was 0.62; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.50.
