HomeMost PopularInvestingInvestors Fume as Diamondback Energy (FANG) Declares Special Dividend While Quarterly Revenues...

Investors Fume as Diamondback Energy (FANG) Declares Special Dividend While Quarterly Revenues Fall

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Diamondback Energy (FANG) has managed to stir up a storm among investors with its latest financial report, where third-quarter earnings beat estimates on the back of higher production, but revenue fell short, and the bottom line plunged from the prior year due to a drastic drop in overall realization.

In response to this, the company announced a special dividend of $2.53 per share, further aggravating those who were already rattled by the underperformance in revenue. On top of this, FANGโ€™s board of directors declared a quarterly cash dividend of 84 cents per share, a move that has only added fuel to the fire.

While the company tried to appease investors by executing $56 million of share repurchases during the third quarter of 2023, the damage had already been done. The stock saw a sizable drop in price, leaving shareholders seething.

Production & Realized Prices

FANG managed to ramp up its production of oil and natural gas, but the average realized oil price experienced a significant decrease, leaving shareholders feeling the burn. The company fetched only $54.37 per barrel compared with $67.25 a year ago, adding insult to injury.

Costs & Financial Position

In light of the earnings report, although Diamondbackโ€™s third-quarter cash operating cost decreased, investors were not assuaged by the fact that the company now holds approximately $6.2 billion in long-term debt, representing a debt-to-capitalization of 26.8%.

Guidance

The company has managed to stoke the flames further, with its 2023 outlook for increased hydrocarbon production and a substantial capital spending budget. While this may seem like good news to some, others perceive it as an indicator of more turbulence ahead.

A Zacks Rank #3 (Hold) has only added to the turmoil, leaving investors feeling uncertain about Diamondback Energyโ€™s future prospects.

Overall, Diamondback Energy (FANG) has left investors fuming and uncertain about the path ahead. As shareholders weigh their options, the companyโ€™s future remains uncertain, leaving a bitter taste in the mouths of those who once had high hopes for its performance.

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