Kimbell Royalty (NYSE:KRP) Announces Earnings Results, Misses Estimates By $0.13 EPS

Key Points

• Kimbell Royalty missed quarterly estimates: EPS was $0.12 versus the $0.25 consensus, and revenue of $86.33 million fell short of the $104.41 million estimate, despite growing 7.1% year over year.
• The company reported record daily production of 27,565 BOE, up 7% sequentially, and has completed $367 million in acquisitions since June that management expects to be immediately accretive to distributable cash flow per unit.
• Kimbell declared a quarterly distribution of $0.45 per unit, down from $0.47, representing an approximately 11% annualized yield; management noted that about 76% is expected to be treated as return of capital.

Kimbell Royalty (NYSE:KRP - Get Free Report) announced its quarterly earnings data on Thursday. The energy company reported $0.12 earnings per share for the quarter, missing analysts' consensus estimates of $0.25 by ($0.13), FiscalAI reports. The business had revenue of $86.33 million for the quarter, compared to analyst estimates of $104.41 million. Kimbell Royalty had a return on equity of 14.25% and a net margin of 25.39%. The company's revenue was up 7.1% on a year-over-year basis. During the same period in the prior year, the company earned $0.19 EPS.

Here are the key takeaways from Kimbell Royalty's conference call:

• Kimbell reported record daily production of 27,565 BOE per day, up 7% sequentially, and record line-of-sight wells. Activity also strengthened, with 93 rigs drilling on its acreage at quarter-end.
• The company declared a third-quarter distribution of $0.45 per common unit, equivalent to an approximately 11% annualized tax-advantaged yield; about 76% is expected to be treated as return of capital.
• Kimbell has closed $367 million in acquisitions since June, which management says are expected to be immediately accretive to cash available for distribution per unit. The credit facility borrowing base and commitments rose to $750 million, while net debt was about 1.5 times trailing Adjusted EBITDA at quarter-end.
• Management expects higher oil prices to boost fourth-quarter cash flow, noting that approximately 84% of estimated fourth-quarter oil production is unhedged. It also cited strong drilling visibility and new permits as potential support for future production, though timing remains uncertain.

Kimbell Royalty Price Performance

NYSE KRP traded up $0.13 during mid-day trading on Friday, hitting $15.16. The stock had a trading volume of 872,586 shares, compared to its average volume of 805,623. Kimbell Royalty has a 52-week low of $11.31 and a 52-week high of $17.12. The company has a market cap of $1.74 billion, a price-to-earnings ratio of 19.68 and a beta of 0.38. The company has a 50 day simple moving average of $15.36 and a 200 day simple moving average of $14.81. The company has a quick ratio of 7.30, a current ratio of 7.30 and a debt-to-equity ratio of 0.71.

Kimbell Royalty Cuts Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Monday, November 23rd. Investors of record on Monday, November 16th will be paid a $0.45 dividend. This represents a $1.80 annualized dividend and a yield of 11.9%. The ex-dividend date of this dividend is Monday, November 16th. This is a decrease from Kimbell Royalty's previous quarterly dividend of $0.47. Kimbell Royalty's dividend payout ratio (DPR) is 223.81%.

Analyst Ratings Changes

Several brokerages have commented on KRP. KeyCorp boosted their target price on shares of Kimbell Royalty from $17.00 to $18.00 and gave the stock an "overweight" rating in a research report on Tuesday, September 15th. Zacks Research upgraded shares of Kimbell Royalty from a "hold" rating to a "strong-buy" rating in a report on Wednesday, September 30th. Wall Street Zen upgraded shares of Kimbell Royalty from a "hold" rating to a "buy" rating in a research note on Saturday, August 15th. Finally, Weiss Ratings upgraded shares of Kimbell Royalty from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Tuesday, October 13th. One analyst has rated the stock with a Strong Buy rating, four have given a Buy rating and one has assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of "Buy" and an average target price of $18.25.

Insiders Place Their Bets

In other news, insider Blayne Rhynsburger sold 4,524 shares of the firm's stock in a transaction on Tuesday, August 25th. The stock was sold at an average price of $15.08, for a total value of $68,221.92. Following the completion of the transaction, the insider owned 70,639 shares in the company, valued at $1,065,236.12. This trade represents a 6.02% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Company insiders own 5.60% of the company's stock.

About Kimbell Royalty

Kimbell Royalty Partners, LP NYSE: KRP is a publicly traded oil and natural gas mineral and royalty company. It owns mineral, royalty, overriding royalty, and non-operated working interests in producing and undeveloped properties across the onshore United States.

The partnership generates revenue primarily from its share of oil, natural gas, and natural gas liquids produced from properties operated by third-party exploration and production companies. Its asset base is concentrated in major U.S.

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