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The current Zacks Consensus Estimate for the to-be-reported quarter is $1.62 per share on revenues of $1.95 billion.
Let’s delve into the factors that might have influenced the independent energy producer’s performance in the September quarter.
Factors to Consider for Q3 Results
According to the U.S. Energy Information Administration, in the months of July, August and September during 2020, the average monthly WTI crude price was $40.71, $42.34 and $39.63 per barrel, respectively. In 2021, average prices were $72.49 in July, $67.73 in August and $71.65 in September, reflecting an increase year over year.
The news is even better on the natural gas front. In the third quarter of 2020, U.S. Henry Hub average natural gas prices were $1.77 per MMBtu in July and rose to $2.30 in August before tumbling to $1.92 in September. Coming to 2021, the fuel was trading at $3.84, $4.07 and $5.16 per MMBtu in July, August and September, respectively. In other words, natural gas traded higher in all the three months.
This price boost is likely to drive the third-quarter results of oil and gas producers like Ovintiv.
On the flip side, the company’s total production volumes in the third quarter are likely to have declined sequentially. The Zacks Consensus Estimate for total production volumes is pegged at 532 thousand barrels of oil equivalent per day (MBOE/d), indicating a 4.1% dip from the sequential quarter's reported figure. This downside is expected to have hurt the company’s third-quarter revenues and cash flows.
What Does Our Model Say?
Our proven Zacks model does not conclusively predict an earnings beat for Ovintiv 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 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: Ovintivhas an Earnings ESP of -9.32%.
In the last reported quarter, the Denver, CO-based upstream player reported adjusted earnings per share of $1.11, beating the Zacks Consensus Estimate of $1.06. However, the year-ago bottom line per share was a loss of 43 cents. This upside in results can be attributed to higher commodity price realization and successful cost-control initiatives.
Even though total revenues of $1.69 billion missed the Zacks Consensus Estimate of $1.81 billion, the same improved 1.33% from the year-ago sales of $726 million.
As far as earnings surprises are concerned, Ovintiv’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and matched the same on one occasion, delivering an earnings surprise of 24.27%, on average. This is depicted in the graph below:
While earnings outperformance looks uncertain for Ovintiv this season, here are some firms worth considering from the energy space, which according to our model, have the perfect combination of ingredients to deliver a positive surprise this reporting cycle:
Whiting Petroleum Corporation has an Earnings ESP of +5.63% and is Zacks #1 Ranked, currently. The firm is scheduled to release earnings on Nov 4.
Targa Resources Corp. (TRGP - Free Report) has an Earnings ESP of +15.01% and a Zacks Rank of 1 at present. The firm is scheduled to release earnings on Nov 4.
TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +2.53% and is presently Zacks #3 Ranked. The firm is scheduled to release earnings on Nov 5.
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How is Ovintiv (OVV) Placed Ahead of Q3 Earnings Release?
Ovintiv Inc. (OVV - Free Report) is set to release third-quarter 2021 results after the closing bell on Tuesday, Nov 2.
The current Zacks Consensus Estimate for the to-be-reported quarter is $1.62 per share on revenues of $1.95 billion.
Let’s delve into the factors that might have influenced the independent energy producer’s performance in the September quarter.
Factors to Consider for Q3 Results
According to the U.S. Energy Information Administration, in the months of July, August and September during 2020, the average monthly WTI crude price was $40.71, $42.34 and $39.63 per barrel, respectively. In 2021, average prices were $72.49 in July, $67.73 in August and $71.65 in September, reflecting an increase year over year.
The news is even better on the natural gas front. In the third quarter of 2020, U.S. Henry Hub average natural gas prices were $1.77 per MMBtu in July and rose to $2.30 in August before tumbling to $1.92 in September. Coming to 2021, the fuel was trading at $3.84, $4.07 and $5.16 per MMBtu in July, August and September, respectively. In other words, natural gas traded higher in all the three months.
This price boost is likely to drive the third-quarter results of oil and gas producers like Ovintiv.
On the flip side, the company’s total production volumes in the third quarter are likely to have declined sequentially. The Zacks Consensus Estimate for total production volumes is pegged at 532 thousand barrels of oil equivalent per day (MBOE/d), indicating a 4.1% dip from the sequential quarter's reported figure. This downside is expected to have hurt the company’s third-quarter revenues and cash flows.
What Does Our Model Say?
Our proven Zacks model does not conclusively predict an earnings beat for Ovintiv 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 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: Ovintivhas an Earnings ESP of -9.32%.
Zacks Rank: Ovintivsports a Zacks Rank #1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the Denver, CO-based upstream player reported adjusted earnings per share of $1.11, beating the Zacks Consensus Estimate of $1.06. However, the year-ago bottom line per share was a loss of 43 cents. This upside in results can be attributed to higher commodity price realization and successful cost-control initiatives.
Even though total revenues of $1.69 billion missed the Zacks Consensus Estimate of $1.81 billion, the same improved 1.33% from the year-ago sales of $726 million.
As far as earnings surprises are concerned, Ovintiv’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and matched the same on one occasion, delivering an earnings surprise of 24.27%, on average. This is depicted in the graph below:
Ovintiv Inc. Price and EPS Surprise
Ovintiv Inc. price-eps-surprise | Ovintiv Inc. Quote
Stocks to Consider
While earnings outperformance looks uncertain for Ovintiv this season, here are some firms worth considering from the energy space, which according to our model, have the perfect combination of ingredients to deliver a positive surprise this reporting cycle:
Whiting Petroleum Corporation has an Earnings ESP of +5.63% and is Zacks #1 Ranked, currently. The firm is scheduled to release earnings on Nov 4.
Targa Resources Corp. (TRGP - Free Report) has an Earnings ESP of +15.01% and a Zacks Rank of 1 at present. The firm is scheduled to release earnings on Nov 4.
TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +2.53% and is presently Zacks #3 Ranked. The firm is scheduled to release earnings on Nov 5.