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What's in the Cards for EOG Resources' (EOG) Q1 Earnings?

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EOG Resources, Inc. (EOG - Free Report) is scheduled to report first-quarter 2021 results on May 6, after the closing bell.

In the last reported quarter, the company reported adjusted earnings per share of 71 cents, beating the Zacks Consensus Estimate of 38 cents due to a decline in lease and well expenses, partially offset by lower oil equivalent production volumes.

EOG Resources beat estimates twice in the last four quarters and missed on the other two occasions, delivering an average earnings surprise of 41.7%, as shown in the chart below.

EOG Resources, Inc. Price and EPS Surprise

EOG Resources, Inc. Price and EPS Surprise

EOG Resources, Inc. price-eps-surprise | EOG Resources, Inc. Quote

Let’s see how things have shaped up prior to the announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for the company’s first-quarter earnings per share of $1.50 has witnessed eight upward estimate revisions and one downward movement in the past 30 days. This estimate is indicative of an 172.7% increase from the year-ago reported figure.

The Zacks Consensus Estimate for its first-quarter revenues is pegged at $3.7 billion, suggesting a decrease of 22.4% from the year-ago reported figure.

Factors to Note

EOG Resources’ focus on exploration and production of oil and gas resources in the Permian, Bakken and Eagle Ford is expected to reflect on first-quarter results. However, economic slowdown caused by the coronavirus pandemic might have affected its production volumes.

The Zacks Consensus Estimate for average daily production volumes is pegged at 786 thousand barrels of oil equivalent per day (MBoe/d), indicating a significant decrease from the year-ago period’s 874.1 MBoe/d.

The Zacks Consensus Estimate for average crude oil and condensates price is pegged at $55 per barrel, which indicates a significant increase from the year-ago period’s $46.96. The same for first-quarter average natural gas liquids price is pegged at $25.14 per barrel, signaling an increase from the year-ago figure of $10.94. Also, the consensus estimate for average natural gas price is $5.15 per thousand cubic feet, indicating an increase from $1.67 in the year-ago quarter.

Although a rise in the commodities’ realized price levels might have led to a year-over-year increase in profits, the negative impacts of lower production volumes makes an earnings beat unpredictable.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for EOG Resources this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: Earnings ESP for the company is -1.56%. This is because the Most Accurate Estimate of earnings of $1.48 per share is lower than the Zacks Consensus Estimate of $1.50. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  

Zacks Rank: EOG Resources currently carries a Zacks Rank #2.

Energy Stocks With Favorable Combination

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:

NOW Inc. (DNOW - Free Report) has an Earnings ESP of +39.13% and a Zacks Rank of 3. It is scheduled to report first-quarter results on May 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pembina Pipeline Corporation (PBA - Free Report) has an Earnings ESP of +2.22% and is a Zacks #3 Ranked player. The company is scheduled to release first-quarter results on May 6. 

Cimarex Energy Co. (XEC - Free Report) has an Earnings ESP of +10.55% and a Zacks Rank of 3. It is scheduled to report first-quarter results on May 5.

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