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Factors You Must Pay Attention to Ahead of BP's Q4 Earnings
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BP plc (BP - Free Report) is set to report fourth-quarter 2020 results on Feb 2.
In the last reported quarter, the British energy giant comfortably beat the Zacks Consensus Estimate, which largely reflected recovering fuel demand and commodity prices since strict social-distancing measures to combat the coronavirus pandemic started easing across the world. However, lower refinery throughput and a decline in oil equivalent production volumes partially offset the positives.
It beat the consensus estimate twice in the prior four quarters, while missed the same on the other two occasions, with an average earnings surprise of 9%. This is depicted in the graph below:
Let’s see how things have shaped up prior to this announcement.
Trend in Estimate Revision
The Zacks Consensus Estimate for fourth-quarter earnings per share of 12 cents has witnessed no upward movement but two downward revisions over the past 30 days. The estimated figure suggests a decline of 84.2% from the prior-year reported number.
The consensus estimate for fourth-quarter revenues of $45.3 billion indicates a 37.2% decline from the year-ago reported figure.
Factors to Consider
Although the price of crude oil in the December quarter recovered sequentially, thanks to rising demand, the commodity’s price was much below the year-ago level. The year-over-year dip in oil prices is likely to have affected the integrated energy major’s total production volumes. The Zacks Consensus Estimate for total hydrocarbon production is pegged at 2,271 thousand barrels of oil equivalent per day (MBoe/d), suggesting a decline from the year-ago quarter’s 2,698 MBoe/d.
We also expect the pandemic to have hurt the London-based energy mammoth’s refinery throughputs in the fourth quarter. It is to be noted that the consensus estimate for the same is pegged at 1,612 thousand barrels per day (MBbls/d), suggesting a decline from 1,847 MBbls/d reported in the December quarter of 2019.
However, the company’s efforts to improve cost discipline are expected to have enabled it to boost the bottom line and partially offset the negatives in the fourth quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for BP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases chances of an earnings beat. That is not the case here as you will see below.
Earnings ESP: The company’s Earnings ESP is -18.10% as the Most Accurate Estimate of 10 cents per share is lower than the Zacks Consensus Estimate of 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BP currently carries a Zacks Rank #3.
Stocks to Consider
Here are some companies from the Energy space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:
Callon Petroleum Company has an Earnings ESP of +27.15% and is a Zacks #3 Ranked player. The company is scheduled to release fourth-quarter results on Feb 24.
Continental Resources, Inc. has an Earnings ESP of +54.05% and a Zacks Rank of 3. It is scheduled to report fourth-quarter results on Feb 16.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Factors You Must Pay Attention to Ahead of BP's Q4 Earnings
BP plc (BP - Free Report) is set to report fourth-quarter 2020 results on Feb 2.
In the last reported quarter, the British energy giant comfortably beat the Zacks Consensus Estimate, which largely reflected recovering fuel demand and commodity prices since strict social-distancing measures to combat the coronavirus pandemic started easing across the world. However, lower refinery throughput and a decline in oil equivalent production volumes partially offset the positives.
It beat the consensus estimate twice in the prior four quarters, while missed the same on the other two occasions, with an average earnings surprise of 9%. This is depicted in the graph below:
BP p.l.c. Price and EPS Surprise
BP p.l.c. price-eps-surprise | BP p.l.c. Quote
Let’s see how things have shaped up prior to this announcement.
Trend in Estimate Revision
The Zacks Consensus Estimate for fourth-quarter earnings per share of 12 cents has witnessed no upward movement but two downward revisions over the past 30 days. The estimated figure suggests a decline of 84.2% from the prior-year reported number.
The consensus estimate for fourth-quarter revenues of $45.3 billion indicates a 37.2% decline from the year-ago reported figure.
Factors to Consider
Although the price of crude oil in the December quarter recovered sequentially, thanks to rising demand, the commodity’s price was much below the year-ago level. The year-over-year dip in oil prices is likely to have affected the integrated energy major’s total production volumes. The Zacks Consensus Estimate for total hydrocarbon production is pegged at 2,271 thousand barrels of oil equivalent per day (MBoe/d), suggesting a decline from the year-ago quarter’s 2,698 MBoe/d.
We also expect the pandemic to have hurt the London-based energy mammoth’s refinery throughputs in the fourth quarter. It is to be noted that the consensus estimate for the same is pegged at 1,612 thousand barrels per day (MBbls/d), suggesting a decline from 1,847 MBbls/d reported in the December quarter of 2019.
However, the company’s efforts to improve cost discipline are expected to have enabled it to boost the bottom line and partially offset the negatives in the fourth quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for BP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases chances of an earnings beat. That is not the case here as you will see below.
Earnings ESP: The company’s Earnings ESP is -18.10% as the Most Accurate Estimate of 10 cents per share is lower than the Zacks Consensus Estimate of 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BP currently carries a Zacks Rank #3.
Stocks to Consider
Here are some companies from the Energy space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +7.67% and a Zacks Rank #2, currently. The company is scheduled to release quarterly earnings on Feb 22. You can see the complete list of today’s Zacks #1 Rank stocks here.
Callon Petroleum Company has an Earnings ESP of +27.15% and is a Zacks #3 Ranked player. The company is scheduled to release fourth-quarter results on Feb 24.
Continental Resources, Inc. has an Earnings ESP of +54.05% and a Zacks Rank of 3. It is scheduled to report fourth-quarter results on Feb 16.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>