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Is VAALCO (EGY) Poised for a Robust Q2 Earnings Performance?
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VAALCO Energy, Inc. (EGY - Free Report) is set to release second-quarter results on Aug 10. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 80 cents per share on revenues of $97.6 million.
Let’s delve into the factors that might have influenced the West Africa-focused oil and gas finder’s results in the June quarter. But it’s worth taking a look at EGY’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last-reported quarter, the Houston, TX-based international upstream operator beat the consensus mark on higher production and commodity prices. EGY had reported adjusted earnings per share of 35 cents, above the Zacks Consensus Estimate of 30 cents. Revenues of $68.7 million generated by the firm also outperformed the Zacks Consensus Estimate by 24.2%.
VAALCO Energy beat the Zacks Consensus Estimate for earnings thrice in the last four quarters and missed in the other, resulting in an earnings surprise of 19.3%, on average. This is depicted in the graph below:
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 471.4% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 107.7% increase from the year-ago period.
Factors to Consider
EGY is likely to have cashed in on the surge in hydrocarbon realizations. In the previous three-month period, VAALCO’s average realized unit price for oil was $109.65 per barrel — a substantial increase from $61.31 in the year-ago period. The increase in crude price is most likely to have continued in the to-be-reported quarter, with the commodity remaining strong on the back of geopolitical tensions and tight fundamentals. This price boost is likely to have buoyed the first-quarter revenues and cash flows of VAALCO.
The company is also expected to have benefited from higher production during the three-month period ended June. In the first quarter of 2022, the company’s output averaged 8,051 barrels of oil per day, up 55.4% from a year ago. The uptick is most likely to have continued in the to-be-reported quarter, thanks to EGY’s impressive production profile from its assets in the Gabon offshore Etame license.
On a somewhat bearish note, a higher expense structure might have dampened some of the positive impact. VAALCO Energy’s total operating cost in the first quarter increased more than 14% year over year to $28.6 million. The upward cost trajectory is likely to have continued in the second quarter due to spurring production and labor-related outgo.
What Does Our Model Say?
The proven Zacks model does not conclusively show that VAALCO Energy is likely to beat estimates in the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: VAALCO has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 80 cents per share each.
Zacks Rank: EGY currently carries a Zacks Rank #1, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
While an earnings beat looks uncertain for VAALCO, here are some firms that you may want to consider on the basis of our model:
Shoals Technologies Group, Inc. (SHLS - Free Report) has an Earnings ESP of +4.26% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 15.
For 2022, Shoals Technologies Group has a projected earnings growth rate of 36.4%. Valued at around $3.9 billion, SHLS has lost 28% in a year.
Enovix Corporation (ENVX - Free Report) has an Earnings ESP of +6.67% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 10.
For 2022, Enovix has a projected earnings growth rate of 41.1%. Valued at around $2.3 billion, ENVX has lost 7.3% in a year.
National Vision Holdings, Inc. (EYE - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 11.
National Vision Holdings topped the Zacks Consensus Estimate by an average of 233.2% in the trailing four quarters. EYE has lost 41.2% in a year.
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Is VAALCO (EGY) Poised for a Robust Q2 Earnings Performance?
VAALCO Energy, Inc. (EGY - Free Report) is set to release second-quarter results on Aug 10. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 80 cents per share on revenues of $97.6 million.
Let’s delve into the factors that might have influenced the West Africa-focused oil and gas finder’s results in the June quarter. But it’s worth taking a look at EGY’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last-reported quarter, the Houston, TX-based international upstream operator beat the consensus mark on higher production and commodity prices. EGY had reported adjusted earnings per share of 35 cents, above the Zacks Consensus Estimate of 30 cents. Revenues of $68.7 million generated by the firm also outperformed the Zacks Consensus Estimate by 24.2%.
Vaalco Energy Inc Price and EPS Surprise
Vaalco Energy Inc price-eps-surprise | Vaalco Energy Inc Quote
VAALCO Energy beat the Zacks Consensus Estimate for earnings thrice in the last four quarters and missed in the other, resulting in an earnings surprise of 19.3%, on average. This is depicted in the graph below:
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 471.4% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 107.7% increase from the year-ago period.
Factors to Consider
EGY is likely to have cashed in on the surge in hydrocarbon realizations. In the previous three-month period, VAALCO’s average realized unit price for oil was $109.65 per barrel — a substantial increase from $61.31 in the year-ago period. The increase in crude price is most likely to have continued in the to-be-reported quarter, with the commodity remaining strong on the back of geopolitical tensions and tight fundamentals. This price boost is likely to have buoyed the first-quarter revenues and cash flows of VAALCO.
The company is also expected to have benefited from higher production during the three-month period ended June. In the first quarter of 2022, the company’s output averaged 8,051 barrels of oil per day, up 55.4% from a year ago. The uptick is most likely to have continued in the to-be-reported quarter, thanks to EGY’s impressive production profile from its assets in the Gabon offshore Etame license.
On a somewhat bearish note, a higher expense structure might have dampened some of the positive impact. VAALCO Energy’s total operating cost in the first quarter increased more than 14% year over year to $28.6 million. The upward cost trajectory is likely to have continued in the second quarter due to spurring production and labor-related outgo.
What Does Our Model Say?
The proven Zacks model does not conclusively show that VAALCO Energy is likely to beat estimates in the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: VAALCO has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 80 cents per share each.
Zacks Rank: EGY currently carries a Zacks Rank #1, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
While an earnings beat looks uncertain for VAALCO, here are some firms that you may want to consider on the basis of our model:
Shoals Technologies Group, Inc. (SHLS - Free Report) has an Earnings ESP of +4.26% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 15.
For 2022, Shoals Technologies Group has a projected earnings growth rate of 36.4%. Valued at around $3.9 billion, SHLS has lost 28% in a year.
Enovix Corporation (ENVX - Free Report) has an Earnings ESP of +6.67% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 10.
For 2022, Enovix has a projected earnings growth rate of 41.1%. Valued at around $2.3 billion, ENVX has lost 7.3% in a year.
National Vision Holdings, Inc. (EYE - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 11.
National Vision Holdings topped the Zacks Consensus Estimate by an average of 233.2% in the trailing four quarters. EYE has lost 41.2% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar