As crude price has been on the rise, energy companies are expected to have reaped the reward of higher prices in the March-end quarter.
Improved crude prices and a strong recovery in fuel demand are expected to have improved downstream businesses’ earnings visibility.
Hike in Oil & Gas Prices
In the first quarter of 2022, oil and natural gas prices were significantly higher than the year-ago quarter. The massive improvement resulted from Russia’s aggressive and unprovoked invasion of Ukraine. Higher commodity prices are expected to have enhanced the profitability of upstream businesses.
The ongoing demand recovery continued to support the strong momentum in oil prices in the first quarter. Improved commodity prices and strong fuel demand have led to increased drilling activities in U.S. resources. Rig count data, as reported by
Baker Hughes Company ( BKR Quick Quote BKR - Free Report) , revealed that the monthly count of rigs in the United States in the March-end quarter of 2022 was significantly higher than the year-earlier quarter figure.
In the week through Jan 1, 2022, the count of oil drilling rigs was 481 in U.S. resources, which increased to 531 in the week through Mar 31, 2022, per the weekly rig count data published by Baker Hughes. The number of gas drilling rigs also increased significantly in the first quarter.
Baker Hughes also publishes monthly rig count data. The rotary rig count, issued by Baker Hughes, usually gets published in major newspapers and trade publications.
Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry. The number of active rigs compared with the prior-week figure indicates the demand trajectory for Baker Hughes’ oilfield services from exploration and production companies.
Driven by increased commodity prices and higher drilling activities, upstream energy companies are likely to have generated handsome earnings in the first quarter. Also, the margin outlook for refiners looks extremely promising due to the huge oil demand.
The improvement is getting reflected in the latest
Zacks Earnings Trend report, which stated that the energy sector’s profitability was $11.1 billion in the year-ago quarter. The sector is expected to earn $34.7 billion in the March-end quarter of 2022. Key Releases
Given the backdrop, let us look at how the following energy companies are placed ahead of their first-quarter earnings releases slated for May 5.
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can see . the complete list of today’s Zacks #1 Rank stocks here ConocoPhillips ( COP Quick Quote COP - Free Report) is geared up to release quarterly earnings before the opening bell.
Our proven model doesn’t predict an earnings beat for ConocoPhillips this time around as it has an Earnings ESP of 0.00% and a Zacks Rank #1. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter.
The Zacks Consensus Estimate for ConocoPhillips’ earnings is pegged at $3.24 per share, suggesting a massive improvement from the prior-year reported figure.
EOG Resources, Inc. ( EOG Quick Quote EOG - Free Report) is set to report quarterly earnings after the closing bell. The chances of EOG Resources delivering an earnings beat this time around are high as it has an Earnings ESP of +0.89% and a Zacks Rank #1.
The Zacks Consensus Estimate for EOG Resources’ earnings is pegged at $3.69 per share, suggesting a massive improvement from the prior-year reported figure.
Canadian Natural Resources Limited ( CNQ Quick Quote CNQ - Free Report) is scheduled to report quarterly earnings on May 5. Similar to ConocoPhillips, the chances of Canadian Natural Resources delivering an earnings beat this time around are low as it has an Earnings ESP of 0.00% and a Zacks Rank #1.
The Zacks Consensus Estimate for Canadian Natural Resources’ earnings is pegged at $1.94 per share, suggesting a significant increase from the prior-year reported figure.
Stay on top of upcoming earnings announcements with the
Zacks Earnings Calendar.