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Why ConocoPhillips (COP) is Likely to Post Q3 Earnings Beat
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ConocoPhillips (COP - Free Report) is set to continue its earnings beat streak for third-quarter 2021, whose results are set to be released on Nov 2, before the opening bell.
In the last reported quarter, the upstream energy company’s adjusted earnings per share of $1.27 comfortably beat the Zacks Consensus Estimate of $1.15, primarily due to increased production volumes attributed to the Concho acquisition and rising realized commodity prices. Production from the Lower 48, Canada, Europe and other regions marked an increase.
The Zacks Consensus Estimate for third-quarter earnings per share of $1.51 has witnessed six upward revisions and one downward movement by firms in the past 30 days. This estimate is indicative of a 587.1% increase from the year-ago reported figure. Similarly, the Zacks Consensus Estimate for third-quarter revenues is pegged at $11.3 billion, suggesting a jump of 157.8% from the year-ago reported figure.
The upstream firm beat earnings estimates thrice in the trailing four quarters and missed the same once, delivering an average surprise of 8.3%. This is depicted in the graph below.
Our proven model predicts an earnings beat for ConocoPhillips 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.
Earnings ESP: Earnings ESP for the company is currently +1.85%. This is because the Most Accurate Estimate is pegged at $1.53 per share, higher than the Zacks Consensus Estimate of $1.51. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ConocoPhillips currently holds a Zacks Rank #1.
Factors Driving the Better-Than-Expected Earnings
Being primarily involved in the exploration and production of oil and natural gas, ConocoPhillips’ earnings and revenues are directly related to commodity prices. The Zacks Consensus Estimate for average realized crude oil price for the third quarter is pegged at $69 per barrel, indicating a significant increase from $39.45 a year ago. Also, the consensus estimate for adjusted average natural gas price is pegged at $4.61 per thousand cubic feet, suggesting an increase from $2.70 in the prior-year period.
The Zacks Consensus Estimate for overall production is pegged at 1,529 thousand barrels of oil equivalent per day (MBoe/d), indicating an increase from 1,067 MBoe/d in the year-ago quarter. The consensus estimate for crude oil production is 815 thousand barrels per day (MBbls/d), signaling a rise from 548 MBbls/d a year ago.
Therefore, increased production, and improved oil and gas prices are likely to have led to a year-over-year rise in profit levels, and positioned the company for an earnings beat.
Other Stocks That Warrant a Look
Here are some other companies from the Energy space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +2.16% and is a Zacks #1 Ranked player. The company is scheduled to release third-quarter results on Nov 4.
Continental Resources, Inc. has an Earnings ESP of +3.81% and a Zacks Rank #1. The firm is scheduled to release quarterly earnings on Nov 3.
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Why ConocoPhillips (COP) is Likely to Post Q3 Earnings Beat
ConocoPhillips (COP - Free Report) is set to continue its earnings beat streak for third-quarter 2021, whose results are set to be released on Nov 2, before the opening bell.
In the last reported quarter, the upstream energy company’s adjusted earnings per share of $1.27 comfortably beat the Zacks Consensus Estimate of $1.15, primarily due to increased production volumes attributed to the Concho acquisition and rising realized commodity prices. Production from the Lower 48, Canada, Europe and other regions marked an increase.
Let’s see how things have shaped up prior to the third-quarter earnings announcement.
Trend in Estimate Revision
The Zacks Consensus Estimate for third-quarter earnings per share of $1.51 has witnessed six upward revisions and one downward movement by firms in the past 30 days. This estimate is indicative of a 587.1% increase from the year-ago reported figure. Similarly, the Zacks Consensus Estimate for third-quarter revenues is pegged at $11.3 billion, suggesting a jump of 157.8% from the year-ago reported figure.
The upstream firm beat earnings estimates thrice in the trailing four quarters and missed the same once, delivering an average surprise of 8.3%. This is depicted in the graph below.
ConocoPhillips Price and EPS Surprise
ConocoPhillips price-eps-surprise | ConocoPhillips Quote
What the Quantitative Model Suggests
Our proven model predicts an earnings beat for ConocoPhillips 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.
Earnings ESP: Earnings ESP for the company is currently +1.85%. This is because the Most Accurate Estimate is pegged at $1.53 per share, higher than the Zacks Consensus Estimate of $1.51. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ConocoPhillips currently holds a Zacks Rank #1.
Factors Driving the Better-Than-Expected Earnings
Being primarily involved in the exploration and production of oil and natural gas, ConocoPhillips’ earnings and revenues are directly related to commodity prices. The Zacks Consensus Estimate for average realized crude oil price for the third quarter is pegged at $69 per barrel, indicating a significant increase from $39.45 a year ago. Also, the consensus estimate for adjusted average natural gas price is pegged at $4.61 per thousand cubic feet, suggesting an increase from $2.70 in the prior-year period.
The Zacks Consensus Estimate for overall production is pegged at 1,529 thousand barrels of oil equivalent per day (MBoe/d), indicating an increase from 1,067 MBoe/d in the year-ago quarter. The consensus estimate for crude oil production is 815 thousand barrels per day (MBbls/d), signaling a rise from 548 MBbls/d a year ago.
Therefore, increased production, and improved oil and gas prices are likely to have led to a year-over-year rise in profit levels, and positioned the company for an earnings beat.
Other Stocks That Warrant a Look
Here are some other companies from the Energy space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:
MPLX LP (MPLX - Free Report) has an Earnings ESP of +3.81% and a Zacks Rank of 2. It is scheduled to report third-quarter results on Nov 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +2.16% and is a Zacks #1 Ranked player. The company is scheduled to release third-quarter results on Nov 4.
Continental Resources, Inc. has an Earnings ESP of +3.81% and a Zacks Rank #1. The firm is scheduled to release quarterly earnings on Nov 3.