Integrated energy player, EQT Corporation’s (EQT) fourth quarter 2013 adjusted earnings increased 9.3% year over year to 47 cents per share but missed the Zacks Consensus Estimate of 66 cents.

For full-year 2013, adjusted earnings were $2.32, up 65% from the prior year. However, the full-year earnings came in below the Zacks Consensus Estimate of $2.50.

Net operating revenue in the quarter was up 23% year over year at $453.0 million. However, reported revenues fell short of the Zacks Consensus Estimate of $572.0 million.

Net operating revenue in 2013 was up 37.9% year over year at $1,713.3 million but failed to meet the Zacks Consensus Estimate of $2,101.0 million.

Segment Details

EQT Production's fourth quarter operating revenue increased 26% year over year to $307.8 million as average daily sales volume rose nearly 32%.

Operating income rose 30% year over year to $94.5 million.

Under the EQT Midstream segment, net gathering revenues increased 8.3% year over year to $90.8 million, owing to 24% growth in gathered volumes. Net transmission revenues increased 33%. Net storage, marketing and other operating revenues were $10.1 million, representing a 31% rise.

Operating income jumped 47.4% year over year to $103.8 million in the reported quarter.

Sale of Distribution Business

In Dec 2013, EQT sold its natural gas distribution business, Equitable Gas Company, LLC, to Peoples Natural Gas. The proceeds from the sale comprised a cash payment of approximately $740 million, as well as select midstream assets and commercial arrangements.

Financials

The company’s operating cash flow was $259.4 million during the quarter, reflecting a decrease of 3.9% year over year.

EQT’s capital expenditure totaled $1,833.5 million in 2013, with $1,423.2 million spent on EQT Production, and $369.4 million on EQT Midstream.

Guidance

Production sales volume for 2014 is projected at 460–480 billion cubic feet equivalent (Bcfe), 24% higher than in 2013; and liquids volume is expected at 6,800–6,900 thousand barrel of oil equivalent (MBBl). Production sales volume for first quarter 2014 is projected at 104 Bcfe; and liquids volume is expected at 1,350–1,400 MBBls.

Zacks Rank

The company currently holds a Zacks Rank #2 (Buy). Meanwhile, one can also consider other energy sector stocks such as Athlon Energy Inc. (ATHL), Cabot Oil & Gas Corporation (COG) and Clayton Williams Energy, Inc. (CWEI). All these stocks currently sport a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on COG
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