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Will Imperial's (IMO) Q1 Earnings Reverse the Previous Miss?
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Imperial Oil Limited (IMO - Free Report) is set to release first-quarter results on Apr 29. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.34 per share on revenues of $10.7 billion.
Let’s delve into the factors that might have influenced the integrated oil company’s performance in the March quarter. But it’s worth taking a look at IMO’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last-reported quarter, the Calgary, Canada-based petroleum operator missed the consensus mark on increased total costs and escalated capital/exploration expenditures. Imperial had reported adjusted earnings per share of 94 cents, 13 cents below the Zacks Consensus Estimate. Revenues of $9.8 billion generated by the firm also came in below the Zacks Consensus Estimate of $10.2 billion.
IMO beat the Zacks Consensus Estimate in two of the last four quarters and missed in the others, which resulted in an earnings surprise of 0.3%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the first-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 219.1% rise year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 94.3% increase from the year-ago period.
Factors to Consider
Imperial is expected to have benefited from the surge in hydrocarbon realizations. In the fourth quarter of 2021, the company’s bitumen price realizations averaged C$65.53 a barrel, up from C$34.19 in the year-ago quarter. Further, IMO received an average realized price of C$92.54 per barrel of synthetic oil compared with the year-ago quarter’s C$51.28. For conventional crude oil, it received C$70.09 per barrel compared with the year-ago quarter’s C$27.21. Prices of NGL increased to C$62.07 a barrel, while the same of gas rose to C$4.92 per thousand cubic feet year over year. The uptick is most likely to have continued in the to-be-reported quarter, thanks to the sharp rise in commodity prices that revisited their multi-year highs following geopolitical tensions and the ongoing macroeconomic recovery. This price boost is likely to have buoyed the first-quarter revenues and cash flows of Imperial.
IMO is also expected to have reaped the reward of a better macro environment in its downstream (or refining) unit. In the previous quarter, segment revenues of C$14,453 million were up significantly from C$4,213 million in the fourth quarter of 2020. Moreover, the segment earned a net income of C$250 million compared with C$106 million reported in the year-ago quarter. The positive movement is expected to have continued in the to-be-reported quarter with post-pandemic demand recovery driving margins higher.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for IMO this season. 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.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Imperial has an Earnings ESP of +1.12% and a Zacks Rank #1.
Imperial Oil is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Devon Energy Corporation (DVN - Free Report) has an Earnings ESP of +2.28% and a Zacks Rank #1. The firm is scheduled to release earnings on May 2.
For 2022, DVN has a projected earnings growth rate of 130.3%. Valued at around $37.1 billion, Devon Energy has surged around 150.6% in a year.
Murphy USA (MUSA - Free Report) has an Earnings ESP of +18.49% and is Zacks #2 Ranked. The firm is scheduled to release earnings on May 3.
MUSA is valued at around $5.9 billion. The company topped the Zacks Consensus Estimate by an average of 24.6% in the trailing four quarters. Murphy USA has gained around 65% in a year.
APA Corporation (APA - Free Report) has an Earnings ESP of +3.60% and a Zacks Rank #2. The firm is scheduled to release earnings on May 4.
The Zacks Consensus Estimate for APA’s 2022 earnings has been revised 54.5% upward over the past 60 days. The company topped the Zacks Consensus Estimate by an average of 13.4% in the trailing four quarters. APA has gained around 90.5% in a year.
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Will Imperial's (IMO) Q1 Earnings Reverse the Previous Miss?
Imperial Oil Limited (IMO - Free Report) is set to release first-quarter results on Apr 29. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.34 per share on revenues of $10.7 billion.
Let’s delve into the factors that might have influenced the integrated oil company’s performance in the March quarter. But it’s worth taking a look at IMO’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last-reported quarter, the Calgary, Canada-based petroleum operator missed the consensus mark on increased total costs and escalated capital/exploration expenditures. Imperial had reported adjusted earnings per share of 94 cents, 13 cents below the Zacks Consensus Estimate. Revenues of $9.8 billion generated by the firm also came in below the Zacks Consensus Estimate of $10.2 billion.
IMO beat the Zacks Consensus Estimate in two of the last four quarters and missed in the others, which resulted in an earnings surprise of 0.3%, on average. This is depicted in the graph below:
Imperial Oil Limited Price and EPS Surprise
Imperial Oil Limited price-eps-surprise | Imperial Oil Limited Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the first-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 219.1% rise year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 94.3% increase from the year-ago period.
Factors to Consider
Imperial is expected to have benefited from the surge in hydrocarbon realizations. In the fourth quarter of 2021, the company’s bitumen price realizations averaged C$65.53 a barrel, up from C$34.19 in the year-ago quarter. Further, IMO received an average realized price of C$92.54 per barrel of synthetic oil compared with the year-ago quarter’s C$51.28. For conventional crude oil, it received C$70.09 per barrel compared with the year-ago quarter’s C$27.21. Prices of NGL increased to C$62.07 a barrel, while the same of gas rose to C$4.92 per thousand cubic feet year over year. The uptick is most likely to have continued in the to-be-reported quarter, thanks to the sharp rise in commodity prices that revisited their multi-year highs following geopolitical tensions and the ongoing macroeconomic recovery. This price boost is likely to have buoyed the first-quarter revenues and cash flows of Imperial.
IMO is also expected to have reaped the reward of a better macro environment in its downstream (or refining) unit. In the previous quarter, segment revenues of C$14,453 million were up significantly from C$4,213 million in the fourth quarter of 2020. Moreover, the segment earned a net income of C$250 million compared with C$106 million reported in the year-ago quarter. The positive movement is expected to have continued in the to-be-reported quarter with post-pandemic demand recovery driving margins higher.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for IMO this season. 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.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Imperial has an Earnings ESP of +1.12% and a Zacks Rank #1.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Imperial Oil is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Devon Energy Corporation (DVN - Free Report) has an Earnings ESP of +2.28% and a Zacks Rank #1. The firm is scheduled to release earnings on May 2.
For 2022, DVN has a projected earnings growth rate of 130.3%. Valued at around $37.1 billion, Devon Energy has surged around 150.6% in a year.
Murphy USA (MUSA - Free Report) has an Earnings ESP of +18.49% and is Zacks #2 Ranked. The firm is scheduled to release earnings on May 3.
MUSA is valued at around $5.9 billion. The company topped the Zacks Consensus Estimate by an average of 24.6% in the trailing four quarters. Murphy USA has gained around 65% in a year.
APA Corporation (APA - Free Report) has an Earnings ESP of +3.60% and a Zacks Rank #2. The firm is scheduled to release earnings on May 4.
The Zacks Consensus Estimate for APA’s 2022 earnings has been revised 54.5% upward over the past 60 days. The company topped the Zacks Consensus Estimate by an average of 13.4% in the trailing four quarters. APA has gained around 90.5% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.