Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



3 Numbers to Watch When LINN Energy LLC Reports Earnings

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Photo credit: LINN Energy LLC

LINN Energy LLC (NASDAQ: LINE  ) as well as its affiliate LinnCo LLC (NASDAQ: LNCO  ) are expected to deliver fourth-quarter and full-year results on Thursday before the market opens. LINN already told investors that we can expect a great quarter. However, if something changed from that update it's because one of the following three numbers didn't live up to expectations.

LINN Energy expects its fourth-quarter production to be in a range of 840-860 MMcfe/d. That would put the company right on track to hit its 2013 organic production growth target of 8%-10% on the year. As investors we'd prefer to see the company at least hit the high end of that target range, if not exceed it.

LINN Energy likely would have easily exceeded its production target if it wasn't for severe winter weather in the Permian Basin and Mid-Continent regions on the quarter. The good news is that while many of its peers already reported weaker than expected production because of issues with the weather, LINN Energy doesn't see the weather impacting its production. So, this will still be a nice reversal for LINN Energy and LinnCo after what happened earlier in the year when poor weather was one of the many issues that caused a poor start to the year.

Photo credit: LINN Energy LLC

Berry Petroleum's contribution
One of the highlights on the quarter will likely be the closing of LinnCo's complex deal with LINN Energy for Berry Petroleum. Because the deal didn't close until the end of the quarter it likely didn't impact LINN's quarterly results by all that much. That said, investors will still want to take a look at what LINN Energy had to say about Berry Petroleum's results on the quarter.

The one number to keep an eye on is production, which should have totaled 44,000 Boe/d. Berry is coming off of a very solid third quarter where it delivered solid oil-rich production growth. We should expect to see nothing less again this quarter. This is why investors will want to key in to what LINN Energy has to say about Berry's results on the quarter.

Excess cash flow
One of LINN Energy's biggest problems to start the year is that it was paying out more to its investors than it was earning. That number reversed last quarter and should be even better this quarter. After reporting income above its distribution of about 1% last quarter, the company expects to produce 5%-10% more cash than it distributes to investors this quarter. Further, it expects its excess cash flow to continue improving now that it has completed the merger with Berry Petroleum.

Because of this it is possible that the company will be in the position to raise its distribution to investors. As some will remember, that was the plan when the company announced it was acquiring Berry last February.

Investor takeaway
Because LINN Energy and by extension LinnCo already announced that we can expect a great quarter, I wouldn't expect that we will see any real surprises in Thursday's report. If anything, we could expect to see the company meet or exceed the high end of its own guidance range and maybe even announce an increase in its distribution. That would be a welcomed sight for investors that endured a pretty rough 2013.

Looking for more rock-solid income stocks like LINN Energy and LinnCo?

One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2854876, ~/Articles/ArticleHandler.aspx, 8/29/2015 3:48:12 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

Today's Market

updated 6 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 3:59 PM
LINE $3.30 Up +0.40 +13.79%
Linn Energy, LLC CAPS Rating: ***
LNCO $2.98 Up +0.37 +14.18%
Linn Co, LLC CAPS Rating: ***