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Is Magellan (MMP) Poised for Another Earnings Beat This Q2?

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Magellan Midstream Partners, L.P. (MMP - Free Report) is set to release second-quarter results on Jul 28. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.01 per share on revenues of $730.4 million.

Let’s delve into the factors that might have influenced the energy infrastructure provider’s performance in the June quarter. But it’s worth taking a look at MMP’s previous-quarter performance first.

Highlights of Q1 Earnings & Surprise History

In the last-reported quarter, this Tulsa, OK-based midstream operator beat the consensus mark primarily on higher transportation volumes. Magellan Midstream had reported adjusted net income per share of $1.08, ahead of the Zacks Consensus Estimate of $1.05. But revenues of $674.7 billion missed the Zacks Consensus Estimate by 18.3% due to lower oil sales.

MMP beat the Zacks Consensus Estimate in each of the last four quarters, which resulted in an earnings surprise of 18.1%, on average. This is depicted in the graph below:
 

Magellan Midstream Partners, L.P. Price and EPS Surprise

Magellan Midstream Partners, L.P. Price and EPS Surprise

Magellan Midstream Partners, L.P. price-eps-surprise | Magellan Midstream Partners, L.P. Quote

 

Trend in Estimate Revision

The Zacks Consensus Estimate for the second-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 26.8% decline year over year. The Zacks Consensus Estimate for revenues, however, suggests an 11.8% increase from the year-ago period.

Factors to Consider

Magellan Midstream is expected to have benefited from the increase in refined product shipments. The unit — the partnership’s largest — is likely to experience more volume move through its pipeline network on the back of overall demand recovery, together with incremental contributions from MMP’s Texas expansion projects. Consequently, the consensus mark for Magellan Midstream’s Q2 refined product volume is pegged at 146 million barrels, up from the prior-year quarter’s level of 138.9 million barrels.

MMP is also expected to reap the rewards of higher revenues from its core, fee-based transportation and terminals’ assets. Considering growing customer demand for the pasrtnership’s impressive portfolio, the Zacks Consensus Estimate for the second-quarter transportation and terminals’ revenues is $475 million, indicating an increase of 4.3% year over year.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for Magellan Midstream 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.

Magellan Midstream has an Earnings ESP of +1.24% and a Zacks Rank #1.

Other Stocks to Consider

Magellan Midstream 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:

Valero Energy Corporation (VLO - Free Report) has an Earnings ESP of +10.22% and a Zacks Rank #1. The firm is scheduled to release earnings on Jul 28.

You can see the complete list of today’s Zacks #1 Rank stocks here.

For 2022, VLO has a projected earnings growth rate of 644.5%. Valued at around $42.5 billion, Valero Energy has gained around 63.3% in a year.

Imperial Oil Limited (IMO - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2. The firm is scheduled to release earnings on Jul 29.

IMO is valued at around $27.5 billion. The Zacks Consensus Estimate for the company’s 2022 earnings has been revised 4.6% upward over the past 60 days. Imperial Oil has surged around 59.3% in a year.

ExxonMobil (XOM - Free Report) has an Earnings ESP of +5.89% and a Zacks Rank #2. The firm is scheduled to release earnings on Jul 29.

XOM topped the Zacks Consensus Estimate by an average of 1.3% in the trailing four quarters, though it experienced an 8% miss in Q1. ExxonMobil has gained some 52.6% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.