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Is Diamondback (FANG) Headed for Another Earnings Beat in Q2?
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Diamondback Energy (FANG - Free Report) is set to release second-quarter results on Aug 1. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $6.65 per share on revenues of $2.5 billion.
Let’s delve into the factors that might have influenced the Permian-focused oil and gas producer’s performance in the June quarter. But it’s worth taking a look at FANG’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last-reported quarter, this Midland, TX-based upstream player beat the consensus mark on strengthening commodity price realizations. Diamondback had reported adjusted earnings per share of $5.20, well ahead of the Zacks Consensus Estimate of $4.74. Revenues of $2.4 billion also outperformed the Zacks Consensus Estimate by 25%.
FANG beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 7.1%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the second-quarter bottom line has been revised 0.9% downward in the past seven days. The estimated figure indicates a 177.1% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 48.9% increase from the year-ago period.
Factors to Consider
Diamondback Energy is expected to have benefited from the surge in oil and natural gas realizations. As a reflection of this price boost, the respective Zacks Consensus Estimate for the second-quarter average sales price for crude and natural gas is pegged at $105 per barrel and $5.51 per thousand cubic feet, up significantly from a year earlier when the company had fetched $63.22 and $2.40. The year-over-year improvement in realizations has most likely buoyed Diamondback Energy’s revenues and cash flows.
Diamondback Energy is also expected to have benefited from a higher margin during the quarter. In the previous three-month period, the company’s unhedged cash margin improved 1% sequentially to 82%. The uptick is most likely to have continued in the to-be-reported quarter, thanks to FANG’s best-in-class cost structure. This margin boost is likely to have buoyed the second-quarter revenues and cash flows of the company.
Why a Likely Positive Surprise?
Our proven model predicts a likely earnings beat for Diamondback Energy 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.
FANG has an Earnings ESP of +0.60% and a Zacks Rank #2.
Other Stocks to Consider
Diamondback Energy 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:
Delek US Holdings, Inc. (DK - Free Report) has an Earnings ESP of +18.14% and a Zacks Rank #1. The firm is scheduled to release earnings on Aug 4.
For 2022, DK has a projected earnings growth rate of 315.2%. Valued at around $2.1 billion, Delek US Holdings has gained around 40.3% in a year.
Chevron Corporation (CVX - Free Report) has an Earnings ESP of +1.35% and a Zacks Rank #2. The firm is scheduled to release earnings on Jul 29.
CVX is valued at around $291.7 billion. The Zacks Consensus Estimate for the company’s 2022 earnings has been revised 5.5% upward over the past 60 days. Chevron has surged around 45.9% 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 53% in a year.
Image: Bigstock
Is Diamondback (FANG) Headed for Another Earnings Beat in Q2?
Diamondback Energy (FANG - Free Report) is set to release second-quarter results on Aug 1. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $6.65 per share on revenues of $2.5 billion.
Let’s delve into the factors that might have influenced the Permian-focused oil and gas producer’s performance in the June quarter. But it’s worth taking a look at FANG’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last-reported quarter, this Midland, TX-based upstream player beat the consensus mark on strengthening commodity price realizations. Diamondback had reported adjusted earnings per share of $5.20, well ahead of the Zacks Consensus Estimate of $4.74. Revenues of $2.4 billion also outperformed the Zacks Consensus Estimate by 25%.
FANG beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 7.1%, on average. This is depicted in the graph below:
Diamondback Energy, Inc. Price and EPS Surprise
Diamondback Energy, Inc. price-eps-surprise | Diamondback Energy, Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line has been revised 0.9% downward in the past seven days. The estimated figure indicates a 177.1% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 48.9% increase from the year-ago period.
Factors to Consider
Diamondback Energy is expected to have benefited from the surge in oil and natural gas realizations. As a reflection of this price boost, the respective Zacks Consensus Estimate for the second-quarter average sales price for crude and natural gas is pegged at $105 per barrel and $5.51 per thousand cubic feet, up significantly from a year earlier when the company had fetched $63.22 and $2.40. The year-over-year improvement in realizations has most likely buoyed Diamondback Energy’s revenues and cash flows.
Diamondback Energy is also expected to have benefited from a higher margin during the quarter. In the previous three-month period, the company’s unhedged cash margin improved 1% sequentially to 82%. The uptick is most likely to have continued in the to-be-reported quarter, thanks to FANG’s best-in-class cost structure. This margin boost is likely to have buoyed the second-quarter revenues and cash flows of the company.
Why a Likely Positive Surprise?
Our proven model predicts a likely earnings beat for Diamondback Energy 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.
FANG has an Earnings ESP of +0.60% and a Zacks Rank #2.
Other Stocks to Consider
Diamondback Energy 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:
Delek US Holdings, Inc. (DK - Free Report) has an Earnings ESP of +18.14% and a Zacks Rank #1. The firm is scheduled to release earnings on Aug 4.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, DK has a projected earnings growth rate of 315.2%. Valued at around $2.1 billion, Delek US Holdings has gained around 40.3% in a year.
Chevron Corporation (CVX - Free Report) has an Earnings ESP of +1.35% and a Zacks Rank #2. The firm is scheduled to release earnings on Jul 29.
CVX is valued at around $291.7 billion. The Zacks Consensus Estimate for the company’s 2022 earnings has been revised 5.5% upward over the past 60 days. Chevron has surged around 45.9% 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 53% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.