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Is a Beat in Store for Continental (CLR) This Earnings Season?

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Continental Resources, Inc. is set to report third-quarter 2021 results on Nov 3, after the closing bell.

In the last reported quarter, the company’s earnings of 91 cents per share beat the Zacks Consensus Estimate of 57 cents owing to increased production volumes and higher realizations of commodity prices.

The company, a leading independent oil producer in the United States, beat the Zacks Consensus Estimate for the bottom line in three of the prior four reported quarters and missed the same in one, delivering a negative earnings surprise of 35.6%, on average. This is depicted in the graph below:

Continental Resources, Inc. Price and EPS Surprise

 

Continental Resources, Inc. Price and EPS Surprise

Continental Resources, Inc. price-eps-surprise | Continental Resources, Inc. Quote

Let’s see how things have shaped up prior to the upcoming earnings announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings per share of $1.22 has seen six upward revisions and two downward movements in the past 30 days. The figure indicates an increase of 862.5% from the year-ago quarter.

Further, the Zacks Consensus Estimate for revenues of $1.4 billion suggests a 102.1% rise from the prior-year quarter.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Continental 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: Continental has an Earnings ESP of +0.90%. This is because the Most Accurate Estimate for the quarter’s earnings is $1.23 per share while the Zacks Consensus Estimate is $1.22. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #1.

Factors Driving the Better-Than-Expected Earnings

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.

Higher oil price is likely to have aided the upstream company to increase production. The Zacks Consensus Estimate for daily crude oil equivalent production is pegged at 330 thousand barrels of oil equivalent per day (MBoE/D), suggesting an increase from 297 MBoE/D in the September quarter of 2020.

Improved oil price and production are likely to have aided Continental’s bottom line.

Other Stocks That Warrant a Look

Here are some other firms that you may want to consider as these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

APA Corporation (APA - Free Report) has an Earnings ESP of +0.42% and is a Zacks #1 Ranked player. The company is scheduled to release third-quarter results on Nov 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Comstock Resources, Inc. (CRK - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank of 1. It is scheduled to report third-quarter results on Nov 2.

Earthstone Energy, Inc. has an Earnings ESP of +0.69% and a Zacks Rank #1. The firm is scheduled to release third-quarter earnings on Nov 4.


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