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Archrock's (AROC) Q1 Earnings Preview: Things to Consider
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Archrock, Inc. (AROC - Free Report) is set to release first-quarter 2024 results on Apr 30. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 22 cents per share on revenues of $260.5 million.
Let’s delve into the factors that might have influenced the Houston, TX-based energy company’s results in the March quarter. But it’s worth taking a look at AROC’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, the provider of natural gas-compression services met the consensus mark on strong utilization and contract margin. AROC had reported earnings per share of 21 cents, in line with the Zacks Consensus Estimate. Revenues of $259.6 million generated by the firm outperformed the Zacks Consensus Estimate by 2.2%.
Archrock beat the Zacks Consensus Estimate in two of the last four quarters and met in the other two, which resulted in an earnings surprise of 8.5%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the first-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 120% surge year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 12.4% increase from the year-ago period.
Factors to Consider
Archrock is expected to have reaped the reward of higher contract operations revenue production during the first quarter. AROC continues to benefit from robust demand for natural gas compressors, which help the commodity to move from the wellhead (where it is produced) to the end market (where it is demanded). In other words, compression equipment is an integral part of natural gas pipelines, helping to push the fuel from one place to another. In the fourth quarter, the company’s contract operations revenues increased more than 20% to $213 million. The uptick is expected to have continued in the to-be-reported quarter on the back of high utilization and pricing.
However, the increase in Archrock’s costs might have dented its to-be-reported bottom line. AROC’s selling, general and administrative costs in the fourth quarter increased around 16% year over year to $33 million. The upward cost trajectory is likely to have continued in the first quarter due to the higher cost of equipment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Archrock is likely to beat estimates in the first quarter of 2024. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: AROC has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 22 cents per share each.
Zacks Rank: Archrock currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for Archrock, here are some energy firms that you may want to consider on the basis of our model:
MPLX LP (MPLX - Free Report) has an Earnings ESP of +4.30% and a Zacks Rank #1 (Strong Buy). The firm is scheduled to release earnings on Apr 30.
The 2024 Zacks Consensus Estimate for MPLX indicates 8.2% year-over-year earnings per unit growth. It has a trailing four-quarter earnings surprise of 7.3%, on average. Valued at around $41.6 billion, MPLX has gained 10.1% in a year.
ExxonMobil (XOM - Free Report) has an Earnings ESP of +0.13% and a Zacks Rank #3. The firm is scheduled to release earnings on Apr 26.
The 2024 Zacks Consensus Estimate for ExxonMobil indicates 1.9% year-over-year earnings per share growth. Valued at around $474.5 billion, XOM has edged up 1.4% in a year.
DT Midstream (DTM - Free Report) has an Earnings ESP of +6.68% and a Zacks Rank #2 (Buy). The firm is scheduled to release earnings on Apr 30.
DT Midstream beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 9.8%, on average. Valued at around $6.1 billion, DTM has gone up 16.3% in a year.
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Archrock's (AROC) Q1 Earnings Preview: Things to Consider
Archrock, Inc. (AROC - Free Report) is set to release first-quarter 2024 results on Apr 30. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 22 cents per share on revenues of $260.5 million.
Let’s delve into the factors that might have influenced the Houston, TX-based energy company’s results in the March quarter. But it’s worth taking a look at AROC’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, the provider of natural gas-compression services met the consensus mark on strong utilization and contract margin. AROC had reported earnings per share of 21 cents, in line with the Zacks Consensus Estimate. Revenues of $259.6 million generated by the firm outperformed the Zacks Consensus Estimate by 2.2%.
Archrock beat the Zacks Consensus Estimate in two of the last four quarters and met in the other two, which resulted in an earnings surprise of 8.5%, on average. This is depicted in the graph below:
Archrock, Inc. Price and EPS Surprise
Archrock, Inc. price-eps-surprise | Archrock, Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the first-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 120% surge year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 12.4% increase from the year-ago period.
Factors to Consider
Archrock is expected to have reaped the reward of higher contract operations revenue production during the first quarter. AROC continues to benefit from robust demand for natural gas compressors, which help the commodity to move from the wellhead (where it is produced) to the end market (where it is demanded). In other words, compression equipment is an integral part of natural gas pipelines, helping to push the fuel from one place to another. In the fourth quarter, the company’s contract operations revenues increased more than 20% to $213 million. The uptick is expected to have continued in the to-be-reported quarter on the back of high utilization and pricing.
However, the increase in Archrock’s costs might have dented its to-be-reported bottom line. AROC’s selling, general and administrative costs in the fourth quarter increased around 16% year over year to $33 million. The upward cost trajectory is likely to have continued in the first quarter due to the higher cost of equipment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Archrock is likely to beat estimates in the first quarter of 2024. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: AROC has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 22 cents per share each.
Zacks Rank: Archrock currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for Archrock, here are some energy firms that you may want to consider on the basis of our model:
MPLX LP (MPLX - Free Report) has an Earnings ESP of +4.30% and a Zacks Rank #1 (Strong Buy). The firm is scheduled to release earnings on Apr 30.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The 2024 Zacks Consensus Estimate for MPLX indicates 8.2% year-over-year earnings per unit growth. It has a trailing four-quarter earnings surprise of 7.3%, on average. Valued at around $41.6 billion, MPLX has gained 10.1% in a year.
ExxonMobil (XOM - Free Report) has an Earnings ESP of +0.13% and a Zacks Rank #3. The firm is scheduled to release earnings on Apr 26.
The 2024 Zacks Consensus Estimate for ExxonMobil indicates 1.9% year-over-year earnings per share growth. Valued at around $474.5 billion, XOM has edged up 1.4% in a year.
DT Midstream (DTM - Free Report) has an Earnings ESP of +6.68% and a Zacks Rank #2 (Buy). The firm is scheduled to release earnings on Apr 30.
DT Midstream beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 9.8%, on average. Valued at around $6.1 billion, DTM has gone up 16.3% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.