Today, EQT Corporation has released its 10-K report. EQT Corporation operates as a natural gas production company in the United States, with 25.0 trillion cubic feet of proved natural gas, natural gas liquids, and crude oil reserves across approximately 2.0 million gross acres. The company's shares have moved -3.3% on the market, and are now trading at a price of $32.96.
In the annual report, EQT reported a net income attributable to EQT Corporation for 2023 of $1,735 million, $4.22 per diluted share, compared to $1,771 million, $4.38 per diluted share, for 2022. The decrease was primarily due to decreased sales of natural gas, NGLs, and oil, partly offset by a gain on derivatives in 2023 compared to a loss on derivatives in 2022, among other factors.
The company faced challenges such as sales volume and operating expenses being negatively impacted by fewer wells turned-in-line during 2022 due to third-party supply chain constraints. Additionally, inflationary pressures and price volatility in the natural gas market have impacted the company's operations. EQT also highlighted the impact of the Mountain Valley Pipeline construction and its fee structure on its operating results during 2024.
In terms of financial metrics, EQT reported a decrease in sales of natural gas, NGLs, and oil, with a 3.9% increase in sales volume. The average realized price decreased for 2023 compared to 2022 due to lower NYMEX and liquids prices, partly offset by favorable cash settled derivatives and favorable differentials. Operating expenses showed varied changes, with some expenses increasing and others decreasing on both an absolute and per Mcfe basis.
From a financial analysis perspective, EQT has generally positive cash flows, rapidly growing revenues, and decreasing reinvestment in the business, with a strong EPS growth trend. However, the firm suffers from not enough current assets to cover current liabilities because its current ratio is 0.59 and has a highly leveraged balance sheet. EQT also has weak operating margins with a positive growth rate.
For more information, read the company's full 10-K submission here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $4,558 | $4,416 | $3,059 | $3,065 | $7,498 | $8,346 |
| Revenue Growth | n/a | -3.1% | -30.74% | 0.19% | 144.65% | 11.31% |
| Operating Margins | -61% | -26% | -28% | -44% | 36% | 47% |
| Net Margins | -49% | -28% | -31% | -37% | 24% | 35% |
| Net Income (MM) | -$2,245 | -$1,222 | -$959 | -$1,143 | $1,771 | $2,945 |
| Net Interest Expense (MM) | $229 | $200 | $259 | $290 | $250 | $202 |
| Depreciation & Amort. (MM) | $1,569 | $1,539 | $1,393 | $1,677 | $1,666 | $1,626 |
| Earnings Per Share | -$8.6 | -$4.79 | -$3.68 | -$3.54 | $4.38 | $7.67 |
| EPS Growth | n/a | 44.3% | 23.17% | 3.8% | 223.73% | 75.11% |
| Diluted Shares (MM) | 261 | 255 | 261 | 323 | 406 | 416 |
| Free Cash Flow (MM) | -$23 | $249 | $495 | $607 | $2,065 | $1,779 |
| Capital Expenditures (MM) | $2,999 | $1,602 | $1,042 | $1,055 | $1,400 | $1,839 |
| Current Ratio | 0.84 | 1.3 | 0.69 | 0.44 | 1.08 | 0.59 |
| Total Debt (MM) | $5,402 | $5,309 | $5,205 | $6,546 | $6,102 | $5,916 |
| Net Debt / EBITDA | -4.45 | 13.72 | 10.06 | 20.37 | 1.06 | 1.06 |
EQT has generally positive cash flows, rapidly growing revenues and decreasing reinvestment in the business, and a strong EPS growth trend. However, the firm suffers from not enough current assets to cover current liabilities because its current ratio is 0.59 and a highly leveraged balance sheet. Finally, we note that EQT has weak operating margins with a positive growth rate.
