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Range Resources’ conservative accounting may explain its soft earnings performance.

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Range Resources Analysis

TLDR:

  • Range Resources Corporation’s soft earnings may be due to conservative accounting
  • Unusual items affecting profit are not expected to be repeated, potentially leading to higher profit in the future

Soft earnings at Range Resources Corporation (NYSE:RRC) have not alarmed shareholders, as underlying factors indicate positive trends. Unusual items have impacted profit in the past year, but are not likely to recur, suggesting higher profits in the future. While EPS has decreased, there are warning signs to consider when evaluating the company’s performance.

Key Points:

Range Resources Corporation operates as an independent natural gas, natural gas liquids (NGLs), crude oil, and condensate company in the United States. The company’s conservative accounting practices may explain its soft earnings and reduced profit due to unusual items amounting to US$102m in the last twelve months.

Despite the decrease in EPS, the potential for higher profit in the future is suggested by the non-recurring nature of these unusual expenses. Analysts’ forecasts for future profitability are worth considering when evaluating the company’s performance.

It is crucial to look beyond the headline numbers and consider risks facing Range Resources Corporation. Factors such as return on equity, insider buying, and the company’s overall valuation can provide a more comprehensive understanding of its financial health and potential for growth.

For a more detailed analysis of Range Resources Corporation and to assess whether the company is undervalued or overvalued, comprehensive research including fair value estimates, risks, dividends, insider transactions, and financial health should be considered.


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