Range Resources Q1 Earnings Beat on Higher Price Realizations

Range Resources Corporation RRC reported first-quarter 2025 adjusted earnings of 96 cents per share, which beat the Zacks Consensus Estimate of 90 cents. The bottom line also improved from the prior-year level of 69 cents. 

Total quarterly revenues of $854 million beat the Zacks Consensus Estimate of $811 million. The top line also increased from the prior-year figure of $721 million. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The strong quarterly results can be primarily attributed to higher gas equivalent production and increased natural gas price realizations.

Range Resources Corporation Price, Consensus and EPS Surprise

Range Resources Corporation price-consensus-eps-surprise-chart | Range Resources Corporation Quote

Operational Performance

Production averaged 2,200.3 million cubic feet equivalent per day (Mcfe/d), higher than the year-ago quarter’s level of 2,141.5 Mcfe/d. The figure also beat our projection of 2,169.3 Mcfe/d. Natural gas contributed approximately 69% to the company’s total production, while NGLs and oil accounted for the rest. 

Natural gas production increased 4% year over year. Oil production decreased 30%, while NGL output increased 3% in the same time frame.

Total price realization (excluding derivative settlements and before third-party transportation costs) averaged $4 per Mcfe, up 37% year over year. Notably, price realization came in lower than our estimate of $4.08 per Mcfe. Natural gas price increased 76% on a year-over-year basis to $3.61 per Mcf. NGL price increased 6%, while oil price fell 5%.

Costs & Expenses

Total costs and expenses increased 9% year over year to $580.8 million. The reported figure was higher than our expectation of $562.9 million. Transportation, gathering, processing and compression costs, which constitute a significant part of the total costs, increased to $306.1 million from $290.9 million in the prior-year quarter.

Capital Expenditure & Balance Sheet

Drilling and completion expenditure amounted to $130 million in the reported quarter. An additional $16 million was spent on acreage and $1 million on infrastructure and other investments.

At the end of the first quarter, Range Resources reported a total debt of $1,696.5 million, net of deferred financing costs.

Outlook

Range Resources expects its total production for 2025 to be 2.2 billion cubic feet equivalent per day, of which more than 30% has been attributed to liquids production. It has also projected a capital budget of $650-$690 million for the year.

RRC’s Zacks Rank and Key Picks

RRC currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Archrock Inc. AROC, Nine Energy Service NINE and Kinder Morgan, Inc. KMI. While Archrock currently sports a Zacks Rank #1 (Strong Buy), Nine Energy Service and Kinder Morgan carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues. With natural gas playing an increasingly important role in the energy transition journey, AROC is expected to witness sustained demand for its services.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. It operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the need for NINE’s services is anticipated to increase, which should position the company for growth in the long run.

Kinder Morgan is a leading North American midstream player with a stable and resilient business model, largely driven by take-or-pay contracts. KMI’s stable business model shields it from commodity price volatility, resulting in predictable earnings and facilitating reliable capital returns to its shareholders. In the first quarter of 2025, Kinder Morgan increased its quarterly cash dividend to 29.25 cents, reflecting an approximately 2% increase from the prior-year level. 

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This article originally published on Zacks Investment Research (zacks.com).

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