Back to top

Image: Bigstock

Hess (HES) Gears Up for Q3 Earnings: What's in the Cards?

Read MoreHide Full Article

Hess Corporation (HES - Free Report) is set to report third-quarter 2021 results on Oct 27, before the opening bell.

In the last reported quarter, the leading global independent energy company reported adjusted earnings per share of 24 cents, beating the Zacks Consensus Estimate of 19 cents, largely backed by higher commodity price realizations despite encountering lower crude oil and natural gas liquids production.

Markedly, Hess beat the consensus estimate in three of the prior four quarters and met once, with the average earnings surprise being 31.5%. This is depicted in the graph below:

Hess Corporation Price and EPS Surprise

Hess Corporation Price and EPS Surprise

Hess Corporation price-eps-surprise | Hess Corporation Quote

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

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings per share of 39 cents has witnessed one upward revision and four downward movements in the past 60 days. The estimated figure suggests an improvement of 154.9% from the prior-year reported number.

The consensus estimate for third-quarter revenues of $1.6 billion indicates a 38.7% rise from the year-ago reported figure.

Factors to Note

The price of West Texas Intermediate crude oil has significantly improved over the past few months. The rollout of multiple vaccines against the coronavirus pandemic helped in boosting fuel demand recovery, thereby lifting crude price. This is expected to have increased Hess’ bottom line in the third quarter.

It earlier stated that the Bakken Shale Play will witness an increase in rig count to three in September. Despite the potential Bakken production ramp-up, output is likely to have declined year over year in the third quarter. The Zacks Consensus Estimate for the company’s oil production is pegged at 137 thousand barrels per day (MBbls/d), suggesting a decline from 168 MBbls/d in the September quarter of 2020.  

Overall, the Zacks Consensus Estimate for total production is pegged at 265 thousand barrels of oil equivalent per day (Mboe/d), indicating a decline from 321 Mboe/d in the prior-year quarter, making an earnings beat uncertain. Nonetheless, strong production from offshore Guyana’s Stabroek Block — wherein it has Exxon Mobil Corporation (XOM - Free Report) as the operator — might have partially offset the negative impacts on total output.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Hess 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. That is not the case here as you will see below.

Earnings ESP: The company’s Earnings ESP is -33.33%. This is because the Most Accurate Estimate is currently pegged at earnings of 26 cents per share, below the Zacks Consensus Estimate of 39 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Stocks to Consider

While an earnings beat looks uncertain for Hess, 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:

EQT Corporation (EQT - Free Report) has an Earnings ESP of +6.44% and a Zacks Rank of 2. It is scheduled to report third-quarter results on Oct 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

Continental Resources, Inc. has an Earnings ESP of +3.36% and a Zacks Rank #1. The firm is scheduled to release quarterly earnings on Nov 1.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Exxon Mobil Corporation (XOM) - free report >>

Hess Corporation (HES) - free report >>

EQT Corporation (EQT) - free report >>

Published in