EOG Q1 results – solid earnings, improved shareholder return framework

EOG Q1 results – solid earnings, improved shareholder return framework

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EOG (EOG) released Q1 results after the close Thursday, beating Street earnings estimates and posting solid free cash flow, while providing a new shareholder return framework:

  • Earnings – the company generated $4.00 in adjusted net income per share during the quarter, versus Street expectations for $3.69.
  • Cash flow – management delivered $2.4b of free cash flow, or 3.5% of the market cap, during Q1.
  • Capital allocation – the board announced a base-plus-special dividend of $2.55 (8.3% yield) and committed to returning 60% of free cash flow to shareholders annually.
  • Guide – management flagged sequential improvement in production into Q2, after beating the midpoint of Q1 guidance on production and capex; annual guidance was unchanged.

Thursday’s results showcase EOG’s (EOG) best-in-class management. While posting strong results, and showing sequential improvement in the business, the company is also putting a firm framework around shareholder returns. It’s not the cheapest stock in the sector, but solid, predictable results likely justify the premium valuation.

Originally Posted on: https://seekingalpha.com/news/3833875-eog-q1-results-solid-earnings-improved-shareholder-return-framework?source=feed_tag_commodities

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