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Here's How Oasis Midstream (OMP) Looks Ahead of Q1 Earnings

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Oasis Midstream Partners LP is set to release first-quarter 2021 results after the closing bell on Wednesday, May 5. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 99 cents per share on revenues of $77.6 million.

Let’s delve into the factors that might have influenced the diversified energy pipeline partnership’s performance in the March quarter. But it’s worth taking a look at Oasis Midstream’s previous-quarter performance first.

Highlights of Q4 Earnings & Surprise History

In the last-reported quarter, the Houston, TX-based energy infrastructure provider beat the consensus mark on the back of strong third-party volumes and efficient cost control. Oasis Midstream reported earnings per unit of $1.61, significantly above the Zacks Consensus Estimate of 67 cents. Moreover, the partnership’s quarterly revenues of $90.6 million beat the Zacks Consensus Estimate by 13%.

As far as earnings surprises are concerned, Oasis Midstream beat the Zacks Consensus Estimate in three of the last four quarters and missed in the other, delivering an earnings surprise of 60.94%, on average. This is depicted in the graph below:
 

Oasis Midstream Partners LP Price and EPS Surprise

Oasis Midstream Partners LP Price and EPS Surprise

Oasis Midstream Partners LP price-eps-surprise | Oasis Midstream Partners LP Quote

 

Trend in Estimate Revision

The Zacks Consensus Estimate for the first-quarter bottom line remained the same in the last seven days. However, the estimated figure indicates a 47.06% fall year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 27.22% decrease from the year-ago period.

Factors to Consider This Quarter

While pipeline entities like Oasis Midstream have a lower correlation to oil and gas prices compared to its peers, this energy sub-industry hasn’t been immune to the coronavirus-induced downturn. With upstream operators pulling back activities and curtailing production in response to last year’s sharply lower commodity pricing and demand, Oasis Midstream faces a potential decline in volumes through its facilities, contributing to expectations for lower profits. As it is, the partnership’s sponsor Oasis Petroleum (OAS - Free Report) shut in wells and pulled back capital spending in response to the weakness in commodity prices. Investors should know that Oasis Midstream was formed to primarily serve the midstream operations of Oasis Petroleum. Therefore, any production curtailment on the part of Oasis Petroleum will have impacted its first-quarter results.

However, as a counter to these negatives, Oasis Midstream has also done a fairly admirable job at reducing costs. Oasis Midstream’s cash outflows as capital expenditure continue to fall as it reins in the spending levels. Apart from significant capital cuts, the partnership should realize sizeable savings from judicious contractor management and optimization of gathering systems. All this is expected to have pushed Oasis Midstream’s first-quarter earnings and cash flows higher.

What Does Our Model Say?

The proven Zacks model does not conclusively show that Oasis Midstream is likely to beat estimates in the first quarter. 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: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -15.15%.

Zacks Rank: Oasis Midstream currently carries a Zacks Rank #1.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

While an earnings beat looks uncertain for Oasis Midstream, here are some firms from the energy space that you may want to consider on the basis of our model:

Whiting Petroleum Corporation (WLL - Free Report) has an Earnings ESP of +7.27% and a Zacks Rank #1. The firm is scheduled to release earnings on May 5.

TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +2.67% and a Zacks Rank #3. The firm is scheduled to release earnings on May 7.

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