It has been about a month since the last earnings report for Magnolia Oil & Gas Corp (MGY). Shares have added about 9.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Magnolia Oil & Gas Corp due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Magnolia Beats Q2 Earnings on Higher Volumes and Price Realization
Magnolia Oil & Gas reported a second-quarter 2026 net profit of 99 cents per share, which beat the Zacks Consensus Estimate of 90 cents. The bottom line more than doubled from the year-ago quarter's 43 cents. This outperformance can be attributed to higher oil and NGL prices and growth in overall production volumes.
The oil and gas exploration and production company's total revenues were $479 million, which beat the Zacks Consensus Estimate of $440 million. The top line also increased 50.2% from $319 million recorded in the year-ago period, driven by higher revenues from oil and natural gas liquids (NGL).
On July 29, South Texas-focused Magnolia declared a cash dividend of 18 cents per common share, payable on Sept. 1, 2026, to its shareholders of record as of Aug. 10. This marks a 9% increase to the company's quarterly dividend rate, providing an annualized dividend of 72 cents per share.
Production & Prices
Magnolia reported the average daily total output of 106,089 barrels of oil equivalent per day (boe/d), increasing 8% from the year-ago quarter's 98,229 boe/d. The figure also beat the Zacks Consensus Estimate of 105,522 boe/d. Oil volumes totaled 41,855 barrels per day (bpd), up 4.7% from the year-ago quarter's level. Moreover, the figure topped our estimate of 41,519 bpd.
MGY reported $373.7 million in revenues from oil, which increased 65% from the year-ago quarter's $226.3 million. The figure also beat the consensus estimate of $332 million. The natural gas revenues of $39.7 million decreased from the year-ago quarter's $42.8 million, missing the consensus estimate of $46 million. The natural gas liquids revenues of $65.4 million increased from the year-ago quarter's $49.8 million and matched the Zacks Consensus Estimate.
Natural gas volumes reached 200,016 thousand cubic feet per day (Mcf/d), up 8.2% from the second quarter of 2025. The figure also surpassed our estimate of 199,743 Mcf/d. Natural Gas Liquids volumes totaled 30,898 bpd, up 12.6% from the year-ago quarter's level. Moreover, the figure beat our estimate of 30,722 bpd.
The average realized crude oil price was $98.13 per barrel, indicating a 58% increase from the year-ago period's $62.20. The average realized natural gas price of $2.18 per Mcf decreased from the year-ago period's $2.55, missing our estimate of $2.25.
Additionally, the average realized natural gas liquids price was $23.25 per barrel, implying a 16.6% increase from the year-ago period's figure, missing our estimate of $25.34. MGY recorded an average sales price of $49.60 per boe compared with $35.68 a year ago.
Balance Sheet
As of June 30, 2026, Magnolia had cash and cash equivalents of $295.9 million. The company had long-term debt of $393.6 million, reflecting a debt-to-capitalization of 15.5%.
MGY spent $125 million on its capital program in the reported quarter. Operating expenses increased to $239.3 million from $211.2 million in the year-ago period.
Guidance
For the third quarter of 2026, Magnolia expects its D&C capital spending to be about $115 million. Total production for the third quarter is estimated to be similar to second-quarter levels.
For the full year of 2026, Magnolia estimates its total D&C capital spending to range between $440 million and $480 million, broadly in line with last year's levels. The company raised its full-year 2026 production growth guidance to 6% from an earlier 5%.
Oil price differentials are expected to average about a $3 per barrel discount to Magellan East Houston, and Magnolia continues to remain fully unhedged across all of its oil and natural gas production.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
VGM Scores
Currently, Magnolia Oil & Gas Corp has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Magnolia Oil & Gas Corp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Magnolia Oil & Gas Corp is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Diamondback Energy (FANG), a stock from the same industry, has gained 7%. The company reported its results for the quarter ended June 2026 more than a month ago.
Diamondback reported revenues of $5.56 billion in the last reported quarter, representing a year-over-year change of +51.2%. EPS of $6.48 for the same period compares with $2.67 a year ago.
For the current quarter, Diamondback is expected to post earnings of $4.66 per share, indicating a change of +51.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +10.3% over the last 30 days.
Diamondback has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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This article originally published on Zacks Investment Research (zacks.com).
