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What Awaits Pioneer Natural (PXD) This Earnings Season?

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Pioneer Natural Resources Company (PXD - Free Report) is set to report third-quarter 2021 results on Nov 3, after the closing bell.

In the last reported quarter, the upstream company announced adjusted earnings of $2.55 per share (excluding one-time items), missing the Zacks Consensus Estimate of $2.62 due to higher operating expenses.

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 $3.87 has witnessed seven upward revisions and three downward movements over the past 30 days. The estimated figure suggests a massive increase from the prior-year reported figure of 17 cents per share. Similarly, the consensus estimate for third-quarter revenues of $4.5 billion indicates a 148.2% increase from the year-ago reported figure.

In the trailing four quarters, Pioneer Natural’s earnings beat the Zacks Consensus Estimate twice and missed the same on the other two occasions, with the average surprise being 18%. This is depicted in the graph below:

Factors to Consider

In the third quarter, the price of crude oil improved significantly from the year-ago level, thanks to the rolling out of coronavirus vaccines, which in turn brightened the outlook for global fuel demand. The Zacks Consensus Estimate for average realized price on an oil-equivalent basis is $51 per barrel for the quarter, signaling a massive jump from $28.22 per barrel a year ago.

An improved commodity pricing scenario is likely to have backed the upstream energy company. Other companies with upstream operations like Matador Resources Company (MTDR - Free Report) and SM Energy Company (SM - Free Report) also posted a massive increase in their bottom lines in the third quarter, backed by a favorable market scenario. A strong presence in the Permian Basin — the most prolific shale play in the United States — is expected to have helped Pioneer Natural in increasing crude production volumes in the September quarter.

The Zacks Consensus Estimate for average crude oil production volumes is pegged at 390 thousand barrels per day (MBbls/d), indicating an increase from the prior-year level of 201 MBbls/d. Also, the consensus estimate for oil equivalent production is pegged at 672 thousand barrels of oil equivalent per day (MBoe/d), suggesting an improvement from the prior-year level of 355 MBoe/d.

Higher commodity prices and increased production are expected to have positioned the company for a year-over-year increase in profits. Yet, it lost millions in hedging, per an SEC filing. The company incurred a $501-million loss in the quarter on oil and gas hedging, as commodity prices jumped to multi-year highs. This has made an earnings beat uncertain for Pioneer Natural for the third quarter. 

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Pioneer Natural this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: Earnings ESP for the company is 0.00%. This is because the Most Accurate Estimate is currently pegged at $3.87 per share, in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  

Zacks Rank: Pioneer Natural currently carries a Zacks Rank #1.

Energy Stock With Favorable Combination

Here’s a company from the Energy space that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat in the upcoming quarterly report:

Targa Resources Corp. (TRGP - Free Report) has an Earnings ESP of +4.00% and a Zacks Rank #1. The firm is scheduled to release quarterly earnings on Nov 4. You can see the complete list of today’s Zacks #1 Rank stocks here.