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Factors to Pay Attention to Ahead of BP's Q1 Earnings Release

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BP plc (BP - Free Report)  is set to report first-quarter 2021 results on Apr 27.

In the last reported quarter, the leading integrated energy company missed the Zacks Consensus Estimate owing to lower oil equivalent production and prices. Notably, the company beat the consensus estimate in one of the prior four quarters, the average negative earnings surprise being 13.9%. This is depicted in the graph below:

BP p.l.c. Price and EPS Surprise

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 first-quarter earnings per share of 43 cents has seen two upward revisions and one downward movement in the past 30 days. The figure indicates an improvement of 79.2% year over year.

However, the Zacks Consensus Estimate for revenues of $31.4 billion suggests a 47.2% decline from the prior-year quarter.

What the Quantitative Model Suggests

Our proven model predicts 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 the chances of an earnings beat.

Earnings ESP: BP has an Earnings ESP of +5.10%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: BP currently carries a Zacks Rank #3.

Factors Driving the Better-Than-Expected Earnings

In the first quarter of this year, the price of crude oil improved significantly, thanks to the rolling out of coronavirus vaccines, which brightened up the outlook of global fuel demand. The rise in oil price is likely to have aided the integrated energy firm’s upstream business. Notably, the consensus estimate for the company’s underlying replacement cost profit, before interest and tax from upstream business, is pinned at $2,722 million, signifying an improvement from $1,871 million in the year-ago quarter.

Moreover, the downstream business is likely to have benefitted sequentially on improved fuel demand. The consensus estimate for the company’s underlying replacement cost profit before interest and tax from downstream operation is pinned at $504 million, signifying a significant improvement from $126 million in the prior quarter.

Other Stocks That Warrant a Look

Here are some other firms that you may want to consider as these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Antero Resources Corporation (AR - Free Report) has an Earnings ESP of +12.94% and is a Zacks #2 Ranked player. The company is scheduled to release first-quarter results on Apr 28. You can see the complete list of today’s Zacks #1 Rank stocks here

EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +9.16% and a Zacks Rank of 1. It is scheduled to report first-quarter results on May 6.

Antero Midstream Corporation (AM - Free Report) has an Earnings ESP of +11.63% and a Zacks Rank #3. The firm is scheduled to release first-quarter earnings on Apr 28.

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