EQT reports Q2 earnings July 24 with gas prices below $2.50 squeezing margins. Hedges on 70% of output at $3.00 provide a thin buffer. Alpha Score 45.
EQT Corp (EQT) reports second-quarter results on July 24, and the setup looks tough. Natural gas prices have stayed below $2.50 per million British thermal units for most of the quarter, squeezing margins across the Appalachian basin. EQT, the largest U.S. gas producer by volume, gets hit hardest when cash costs outrun realized prices.
The company guided for second-quarter production of 535 to 575 billion cubic feet equivalent. At current strip pricing, that range implies revenue well below year-ago levels unless hedges cushion the blow. EQT locked in hedges on roughly 70% of its expected output at an average floor price near $3.00, traders said. That buffer narrows the loss but does not eliminate it.
Costs are the wild card. EQT's per-unit operating expenses ran about $1.50 per Mcfe in the first quarter. If those hold, the hedge floor leaves a thin margin. Any cost creep from well-service inflation or pipeline maintenance would push the quarter into the red.
AlphaScala's proprietary model assigns EQT a score of 45 out of 100, a Mixed label, reflecting the tension between low gas prices and the company's cost structure. The full profile is available on the EQT stock page.
The market already prices in a weak print. EQT shares have fallen 18% this year, roughly in line with the broader gas producer index. The question for the call is whether management sees a second-half recovery in gas prices or plans further cuts to the rig count. EQT idled one frac crew in June. More reductions would signal a longer wait for better prices.
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