Summary
EQT Corporation's first quarter 2018 results, filed on April 26, 2018, were significantly impacted by a substantial impairment charge of $2.3 billion related to non-core production and pipeline assets. This charge led to a net loss attributable to EQT Corporation of $1.586 billion, or $5.99 per diluted share, a stark contrast to the net income of $164.0 million, or $0.95 per diluted share, in the prior year's first quarter. Despite the significant net loss, operational performance showed an 88% increase in production sales volumes, largely due to the acquisition of Rice Energy Inc. in late 2017. Midstream segment revenues also grew, driven by increased gathering and transmission activity. Investors should note the company's ongoing strategic initiatives, including the planned separation of its upstream and midstream businesses into two independent publicly traded companies, expected by the end of Q3 2018. Furthermore, a series of midstream streamlining transactions, including the merger of EQM and RMP, were announced in late April 2018, signaling a significant restructuring of its midstream operations. These strategic moves, while aiming for long-term value creation, introduce complexity and execution risks that investors should monitor closely.
Financial Highlights
50 data points| Revenue | $1.23B |
| Cost of Revenue | $416.66M |
| Gross Profit | $811.99M |
| SG&A Expenses | $39.81M |
| Operating Expenses | $3.26B |
| Operating Income | -$1.95B |
| Interest Expense | $57.91M |
| Net Income | -$1.59B |
| EPS (Basic) | $-5.99 |
| EPS (Diluted) | $-5.99 |
| Shares Outstanding (Basic) | 264.88M |
| Shares Outstanding (Diluted) | 264.88M |
Key Highlights
- 1Reported a net loss of $1.586 billion ($5.99 per diluted share) for Q1 2018, a significant decline from a net income of $164.0 million ($0.95 per diluted share) in Q1 2017, primarily due to a $2.3 billion impairment charge.
- 2Total operating revenues increased to $1.43 billion in Q1 2018 from $894.2 million in Q1 2017, driven by an 88% increase in production sales volumes following the Rice Energy acquisition and growth in midstream services.
- 3Production sales volumes (natural gas, oil, and NGLs) surged by 88.0% to 357,005 MMcfe in Q1 2018 compared to 189,934 MMcfe in Q1 2017.
- 4Midstream segments (EQM Gathering, EQM Transmission, RMP Gathering, RMP Water) showed strong revenue growth, contributing to the overall increase in pipeline, water, and net marketing services revenue.
- 5The company announced plans to separate its upstream and midstream businesses into two independent companies, expected by the end of Q3 2018.
- 6Several midstream streamlining transactions, including the merger of EQM and RMP, were announced in April 2018, indicating significant organizational restructuring.
- 7Capital expenditures increased to $849.4 million in Q1 2018 from $716.9 million in Q1 2017, driven by higher drilling and completion spending and contributions to the Mountain Valley Pipeline (MVP) Joint Venture.