Summary
EQT Corporation's third quarter 2012 results showed a significant year-over-year decrease in net income, largely attributable to a substantial gain on asset dispositions in the prior year period. While revenues remained relatively stable, operating income saw a considerable decline, primarily driven by lower realized natural gas prices, increased depreciation, depletion, and amortization (DD&A), and higher interest expenses. The company's EQT Production segment experienced lower operating income due to depressed natural gas prices and increased operating expenses, despite higher production volumes. The EQT Midstream segment's operating income was significantly impacted by the absence of a large gain on disposition recorded in the prior year, although gathering and transmission volumes saw increases. Financially, EQT Corporation reported a decrease in cash flows from operating activities and a substantial increase in cash used for investing activities, largely due to significant capital expenditures. A key event during the period was the successful Initial Public Offering (IPO) of EQT Midstream Partners, LP, which generated substantial proceeds for the company and provided a new source of financing. The company maintained its dividend payment. Despite the challenges in commodity prices, EQT continued its strategic focus on developing its Marcellus Shale reserves, with substantial capital allocated to drilling and midstream infrastructure.
Financial Highlights
44 data points| SG&A Expenses | $51.48M |
| Operating Expenses | $278.11M |
| Operating Income | $81.25M |
| Interest Expense | $40.46M |
| Net Income | $31.87M |
| EPS (Basic) | $0.21 |
| EPS (Diluted) | $0.21 |
| Shares Outstanding (Basic) | 149.60M |
| Shares Outstanding (Diluted) | 150.39M |
Key Highlights
- 1Net income attributable to EQT Corporation decreased significantly to $31.9 million ($0.21/diluted share) for Q3 2012, down from $178.9 million ($1.19/diluted share) in Q3 2011, primarily due to a large gain on asset disposition in the prior year.
- 2Operating income for EQT Production decreased by 61.2% to $38.3 million due to lower average wellhead sales prices and increased operating expenses, despite a 33% rise in production sales volumes.
- 3EQT Midstream's operating income fell sharply by 77.0% to $51.0 million, largely due to the absence of a $180.1 million gain on the sale of Big Sandy Pipeline in the prior year's quarter.
- 4The company completed the Initial Public Offering (IPO) of EQT Midstream Partners, LP on July 2, 2012, raising approximately $277 million in net proceeds, of which $231 million was distributed to EQT.
- 5Capital expenditures increased to $361.2 million in Q3 2012, up from $347.6 million in Q3 2011, with the majority allocated to EQT Production for well development, particularly in the Marcellus play.
- 6Cash flows provided by operating activities decreased to $670.0 million for the nine months ended September 30, 2012, compared to $736.8 million in the same period of 2011.
- 7The company maintained its regular quarterly cash dividend of $0.22 per share.