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Encana's (ECA) Q2 Earnings & Revenues Top Estimates, Up Y/Y

Calgary, Alberta-based Encana Corporation ECA reported second-quarter 2017 operating earnings of 18 cents per share, ahead of the Zacks Consensus Estimate of 4 cents. Further, the bottom line improved from the year-ago period earnings of 10 cents per share. Improvement in the top line, higher realized prices and reduction in the costs lead to better results.

Quarterly revenues of $1,083 million came above the Zacks Consensus Estimate of $773 million.  Moreover, revenues were 197.5% higher than the prior-year figure of $364 million.

Encana Corporation Price, Consensus and EPS Surprise

 

Production & Prices

Quarterly natural gas production declined approximately 19% year over year to 1,146 million cubic feet per day, while liquids production fell 5% year over year to 124.9 thousand barrels per day.

Encana's realized natural gas price were $2.56 per thousand cubic feet, up 37.6% from the year-ago quarter level of $1.86. Meanwhile, liquids price rose to $41.97 per barrel from $38.47 in the second quarter of 2016, reflecting an increase of 9%.

Costs & Expenses

Total operating expenses reduced by 40.3% from second-quarter 2016 to $762 million. The decline is primarily attributed to the reduction in impairment charges.

Specifically, Encana reported operating costs of $113 million for the reported quarter, 16% lower than the year-ago quarter level. Also, transportation and processing expenses fell 15% to $206 million. Administration and depreciation charges were down by 60% and 16%, respectively.

Capital Spending and Balance Sheet

Encana's capital investments during the quarter were $415 million. As of Jun 31, 2017, cash and cash equivalent was $395 million and long-term debt was $4,198 million. This, in turn, represents a debt-to-capitalization ratio of 38.2%.

Zacks Rank & Stocks to Consider

Encana is a focused pure-play natural gas exploration and production company. It is the second largest gas producer in North America with land and resources in a number of the region's promising shale and tight gas resource plays.  The company currently carries a Zacks Rank #4 (Sell).

Better-ranked players from the broader energy space include McDermott International, Inc. MDR, SeaDrill Limited SDRL and Petróleo Brasileiro S.A. or Petrobras PBR. All the three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

McDermott delivered an average positive earnings surprise of 387.5% in the last four quarters.

SeaDrill pulled off an average positive earnings surprise of 97.13% in the last four quarters.

Petrobras came up with an average positive earnings surprise of 59.58% in the last four quarters.

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Petroleo Brasileiro S.A.- Petrobras (PBR): Free Stock Analysis Report
 
McDermott International, Inc. (MDR): Free Stock Analysis Report
 
Encana Corporation (ECA): Free Stock Analysis Report
 
Seadrill Limited (SDRL): Free Stock Analysis Report
 
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