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Will Black Stone (BSM) Continue to Beat on Earnings in Q2?

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Black Stone Minerals, L.P. (BSM - 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 39 cents per unit on revenues of $155.4 million.

Let’s delve into the factors that might have influenced the Haynesville-focused royalty trust partnership’s performance in the June quarter. But it’s worth taking a look at BSM’s previous-quarter performance first.

Highlights of Q1 Earnings & Surprise History

In the last-reported quarter, this Houston, TX-based oil and gas mineral rights owner beat the consensus mark on strengthening commodity price realizations. Black Stone Minerals had reported adjusted earnings per share of 39 cents, ahead of the Zacks Consensus Estimate of 34 cents. Revenues of $36.4 million, however, missed the Zacks Consensus Estimate by a big margin due to timing issues related to its upstream partners and some temporary production shut-ins by XTO Energy on BSM’s acreage.

BSM beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 42.5%, on average. This is depicted in the graph below:
 

Black Stone Minerals, L.P. Price and EPS Surprise

Black Stone Minerals, L.P. Price and EPS Surprise

Black Stone Minerals, L.P. price-eps-surprise | Black Stone Minerals, L.P. Quote

 

Trend in Estimate Revision

The Zacks Consensus Estimate for the second-quarter bottom line has been revised 2.5% downward in the past seven days. The estimated figure indicates a 56% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 165.9% increase from the year-ago period.

Factors to Consider

Black Stone Minerals 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 realized price for oil and condensate, and natural gas is pegged at $68 per barrel and $5.40 per thousand cubic feet, up significantly from a year earlier when the partnership had fetched $62.72 and $3.60. The year-over-year improvement in realizations has most likely buoyed Black Stone Mineral’s revenues and cash flows.

On a further bullish note, BSM is likely to have experienced an increase in liquids output following the release of suspended production volumes across its mineral position. Consequently, the consensus mark for the partnership’s Q2 volume is pegged at 878,000 barrels, up from the prior-year quarter’s level of 860,000 barrels.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for Black Stone Minerals 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.

BSM has an Earnings ESP of +0.43% and a Zacks Rank #2.

Other Stocks to Consider

Black Stone Minerals 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, Delek US Holdings has a projected earnings growth rate of 315.2%. Valued at around $2.1 billion, DK has gained around 40.3% in a year.

Cactus, Inc. (WHD - Free Report) has an Earnings ESP of +3.74% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 4.

Cactus topped the Zacks Consensus Estimate by an average of 4.3% in the trailing four quarters, including a 3.5% beat in Q1. WHD has edged up some 2.5% in a year.

ConocoPhillips (COP - Free Report) has an Earnings ESP of +1.21% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 4.

For 2022, ConocoPhillips has a projected earnings growth rate of 142.9%. Valued at around $119.1 billion, COP has gained around 61.7% in a year.

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