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Factors Shaping the Fate of PDC Energy's (PDCE) Q2 Earnings

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PDC Energy, Inc. is set to release second-quarter 2021 results after the closing bell on Aug 4. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.19 per share on revenues of $475.55 million.

Let’s delve into the factors that might have influenced the independent oil and natural gas producer’s results in the June quarter. But it’s worth taking a look at PDC Energy’s previous-quarter performance first.

Highlights of Q1 Earnings & Surprise History

In the last-reported quarter, the Denver-CO based upstream player beat the consensus mark owing to better-than-anticipated commodity price realizations. PDC Energy had reported adjusted earnings per share of $1.41, comfortably beating the Zacks Consensus Estimate of 83 cents. However, total revenues of $286 million underperformed the Zacks Consensus Estimate by 27.94%, primarily due to lower-than-expected production volumes.

PDC Energy beat the Zacks Consensus Estimate in each of the last four quarters, delivering an earnings surprise of 79.46%, on average. This is depicted in the graph below:

PDC Energy, Inc. Price and EPS Surprise

PDC Energy, Inc. Price and EPS Surprise

PDC Energy, Inc. price-eps-surprise | PDC Energy, Inc. Quote

 

Factors to Consider

Commodity prices have rebounded sharply, revisiting their multi-year highs following the vaccine progress and the ongoing macroeconomic recovery. As a reflection of this price boost, the Zacks Consensus Estimate for second-quarter average sales price for oil and natural gas are pegged at $63-a-barrel and $1.97 per thousand cubic feet, respectively, indicating a surge from the year-ago levels of $6.22 and 76 cents. The significant year-over-year improvement in realizations has most likely impacted PDC Energy’s revenues and cash flows for the to-be-reported quarter.

On a slightly bearish note, the company is likely to have faced an uptick in expenses. Extreme weather events in February and March prompted PDC Energy to bring forward a frac holiday originally planned for the second quarter into the first. This resulted in the shifting of some capital from the March quarter to the June one. This might impact PDC Energy’s cash flows in the second quarter by pushing up costs.

What Does Our Model Say?

The proven Zacks model does not conclusively show that PDC Energy is likely to beat estimates in the second 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: PDC has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.19 per share each.

Zacks Rank: PDC currently carries a Zacks Rank #1, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.

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

Stocks to Consider

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

Devon Energy Corporation (DVN - Free Report) has an Earnings ESP of +0.15% and a Zacks Rank #1. The firm is scheduled to release earnings on Aug 3.

EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +0.50% and a Zacks Rank #1. The firm is scheduled to release earnings on Aug 4.

Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +1.38% and is Zacks #2 Ranked. The firm is scheduled to release earnings on Aug 5.

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