Summary
EQT Corporation reported a net loss of $167.1 million, or ($0.65) per diluted share, for the first quarter of 2020, a significant shift from the $190.7 million net income ($0.75 per diluted share) reported in the same period of 2019. This downturn was primarily driven by a substantial loss on its investment in Equitrans Midstream Corporation, a loss on the exchange of long-lived assets, and a loss on debt extinguishment. While operating revenues saw a decrease, this was partially offset by a significant gain from the Equitrans Share Exchange and a gain on derivatives not designated as hedges, largely due to declining commodity prices. The company's financial position reflects a deleveraging plan aimed at reducing debt by approximately $1.5 billion by mid-2020. EQT is pursuing this through asset monetizations and increased free cash flow, with active negotiations for non-core asset sales. The company also received a significant tax refund acceleration due to the CARES Act, contributing to its liquidity. Despite the net loss, the company maintained sufficient liquidity and was in compliance with its debt covenants as of the reporting period. The outlook for 2020 anticipates capital expenditures between $1.075 billion and $1.175 billion, with sales volumes projected between 1,450 Bcfe and 1,500 Bcfe.
Financial Highlights
49 data points| Revenue | $715.20M |
| Cost of Revenue | $439.83M |
| Gross Profit | $275.37M |
| SG&A Expenses | $34.94M |
| Operating Expenses | $983.70M |
| Operating Income | $123.36M |
| Interest Expense | $62.37M |
| Net Income | -$167.14M |
| EPS (Basic) | $-0.65 |
| EPS (Diluted) | $-0.65 |
| Shares Outstanding (Basic) | 255.44M |
| Shares Outstanding (Diluted) | 255.44M |
Key Highlights
- 1Net Loss Reported: EQT posted a net loss of $167.1 million ($0.65/share) for Q1 2020, a sharp contrast to the $190.7 million net income ($0.75/share) in Q1 2019.
- 2Significant Equitrans Midstream Impact: A substantial loss on investment in Equitrans Midstream Corporation and a gain on the Equitrans Share Exchange significantly impacted quarterly results, highlighting EQT's strategic relationship with the midstream operator.
- 3Derivative Gains Boost Revenue: A gain of $389.4 million on derivatives not designated as hedges positively impacted operating revenues, largely driven by decreasing commodity prices.
- 4Debt Deleveraging Efforts: The company is actively pursuing a deleveraging plan to reduce debt by approximately $1.5 billion, focusing on asset monetizations and free cash flow generation.
- 5CARES Act Benefit: EQT benefited from an accelerated federal AMT credit refund of $94.8 million due to the CARES Act, contributing to its tax receivable.
- 6Liquidity and Covenants: Despite the net loss, EQT reported sufficient liquidity and compliance with all debt covenants as of March 31, 2020.
- 7Capital Expenditure Outlook: The company projects 2020 capital expenditures to be in the range of $1.075 billion to $1.175 billion.