With oil prices improving remarkably, the upstream business of energy giants is likely to have gained in the September quarter. Recovered fuel demand is expected to have aided downstream operations.
Oil Price Surge
The price of West Texas Intermediate crude improved significantly in the September quarter compared to the year-ago quarter. The massive improvement is attributed to fuel demand recovery, thanks to the rolling out of coronavirus vaccines at a massive scale.
Oil price recovery has led exploration and production companies to return to shale plays gradually. Per data from
Baker Hughes Company ( BKR Quick Quote BKR - Free Report) , the tally for oil drilling rigs in the United States for the week through Sep 24 was 421, improving from 376 for the week through Jul 2. Thus, compared to the September quarter of 2020, the market witnessed considerably higher oil drilling rigs year over year. From the tally of 185 for the week through Jul 2, 2020, the count of oil drilling rigs declined to 183 for the week through Sep 25, 2020. Quarterly Earnings to Turnaround
Amid the backdrop of increased oil prices and higher drilling activities, upstream energy companies are likely to have generated handsome earnings in the third quarter of this year. In addition, the rolling out of coronavirus vaccines is likely to have aided energy companies’ refining operations. This is because compared to the prior-year equivalent quarter, more people have socialized and gone to work. Per the latest
Zacks Earnings Trends report, the energy sector is likely to generate earnings of $22.6 billion for the September-end quarter of this year, indicating a massive improvement year over year. Key Releases
Given the backdrop, let us look at how the following energy companies are placed ahead of their third-quarter earnings releases slated for Oct 27.
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can see . the complete list of today’s Zacks #1 Rank stocks here Hess Corporation ( HES Quick Quote HES - Free Report) is geared up to release third-quarter earnings before the opening bell.
Our proven model doesn’t predict an earnings beat for the leading oil and gas producer this time around as it has an Earnings ESP of -26.13% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter. EQT Corporation ( EQT Quick Quote EQT - Free Report) is set to report quarterly earnings after the closing bell. The chances of the leading independent natural gas production company delivering an earnings beat this time around are low as it has an Earnings ESP of -6.15% and a Zacks Rank #2.
Being a natural gas producer, EQT is likely to have been aided by a higher year-over-year gas price in the September quarter.
Antero Resources ( AR Quick Quote AR - Free Report) is scheduled to report quarterly earnings after the closing bell. Similar to Hess, the chances of this upstream energy company delivering an earnings beat this time around are low as it has an Earnings ESP of -7.82% and a Zacks Rank #1. Suncor Energy Inc. ( SU Quick Quote SU - Free Report) is geared up to release quarterly results after the closing bell.
Our proven model doesn’t predict an earnings beat for Canada's leading integrated energy company this time around as it has an Earnings ESP of 0.00% and a Zacks Rank #1.