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Can Global Partners (GLP) Maintain Earnings Beat Run in Q3?
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Global Partners LP (GLP - Free Report) is set to release third-quarter results on Nov 4. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.33 per unit on revenues of $4.1 billion.
Let’s delve into the factors that might have influenced the vertically integrated energy partnership’s results in the September quarter. But it’s worth taking a look at MPC’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last-reported quarter, the Waltham, MA-based gasoline station and convenience store operator handily beat the consensus mark on strength in its Wholesale segment. GLP had reported adjusted earnings per unit of $2.35, well above the Zacks Consensus Estimate of $1.21. Revenues of $5.3 billion generated by the firm also came in above the Zacks Consensus Estimate by 23.4%.
Global Partners beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 263.9%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the third-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 54.7% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 23.8% increase from the year-ago period.
Factors to Consider
GLP is expected to have benefited from favorable market conditions in its Wholesale segment. In the second quarter of 2022, the partnership’s wholesale product margin of $90.6 million rocketed from $33.5 million a year ago. The uptick is most likely to have continued in the third quarter on the back of robust distillate and gasoline prices.
Global Partners is also expected to have reaped the reward of higher volumes across its Gasoline Distribution and Station Operations unit. During the previous three-month period, GLP reported volumes of 422.3 million gallons, up about 6.9% from a year ago. The momentum is likely to have continued in the to-be-reported quarter, with contributions from recent acquisitions.
On a somewhat bearish note, a higher expense structure might have dampened some of the positive impact. Global Partners’ operating costs in the second quarter increased some 23.1% year over year to $108.5 million. The upward cost trajectory is likely to have continued in the July-September period primarily due to higher salary and rent outgo.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Global Partners is likely to beat estimates in the third 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: Global Partners has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.33 per share each.
Zacks Rank: GLP currently carries a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for Global Partners, here are some firms from the energy space that you may want to consider on the basis of our model:
Cactus, Inc. (WHD - Free Report) has an Earnings ESP of +2.74% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov 7.
For 2022, Cactus has a projected earnings growth rate of 144.4%. Valued at around $3.9 billion, WHD has gained 19.5% in a year.
HF Sinclair Corporation (DINO - Free Report) has an Earnings ESP of +1.17% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov 7.
For 2022, HF Sinclair has a projected earnings growth rate of 846.1%. Valued at around $13.5 billion, DINO has gained 88% in a year.
Diamondback Energy (FANG - Free Report) has an Earnings ESP of +0.63% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 7.
Diamondback topped the Zacks Consensus Estimate by an average of 7% in the trailing four quarters, including a 6.2% beat in Q2. Valued at around $27.5 billion, FANG has gained 37.3% in a year.
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Can Global Partners (GLP) Maintain Earnings Beat Run in Q3?
Global Partners LP (GLP - Free Report) is set to release third-quarter results on Nov 4. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.33 per unit on revenues of $4.1 billion.
Let’s delve into the factors that might have influenced the vertically integrated energy partnership’s results in the September quarter. But it’s worth taking a look at MPC’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last-reported quarter, the Waltham, MA-based gasoline station and convenience store operator handily beat the consensus mark on strength in its Wholesale segment. GLP had reported adjusted earnings per unit of $2.35, well above the Zacks Consensus Estimate of $1.21. Revenues of $5.3 billion generated by the firm also came in above the Zacks Consensus Estimate by 23.4%.
Global Partners beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 263.9%, on average. This is depicted in the graph below:
Global Partners LP Price and EPS Surprise
Global Partners LP price-eps-surprise | Global Partners LP Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the third-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 54.7% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 23.8% increase from the year-ago period.
Factors to Consider
GLP is expected to have benefited from favorable market conditions in its Wholesale segment. In the second quarter of 2022, the partnership’s wholesale product margin of $90.6 million rocketed from $33.5 million a year ago. The uptick is most likely to have continued in the third quarter on the back of robust distillate and gasoline prices.
Global Partners is also expected to have reaped the reward of higher volumes across its Gasoline Distribution and Station Operations unit. During the previous three-month period, GLP reported volumes of 422.3 million gallons, up about 6.9% from a year ago. The momentum is likely to have continued in the to-be-reported quarter, with contributions from recent acquisitions.
On a somewhat bearish note, a higher expense structure might have dampened some of the positive impact. Global Partners’ operating costs in the second quarter increased some 23.1% year over year to $108.5 million. The upward cost trajectory is likely to have continued in the July-September period primarily due to higher salary and rent outgo.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Global Partners is likely to beat estimates in the third 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: Global Partners has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.33 per share each.
Zacks Rank: GLP currently carries a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for Global Partners, here are some firms from the energy space that you may want to consider on the basis of our model:
Cactus, Inc. (WHD - Free Report) has an Earnings ESP of +2.74% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov 7.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, Cactus has a projected earnings growth rate of 144.4%. Valued at around $3.9 billion, WHD has gained 19.5% in a year.
HF Sinclair Corporation (DINO - Free Report) has an Earnings ESP of +1.17% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov 7.
For 2022, HF Sinclair has a projected earnings growth rate of 846.1%. Valued at around $13.5 billion, DINO has gained 88% in a year.
Diamondback Energy (FANG - Free Report) has an Earnings ESP of +0.63% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 7.
Diamondback topped the Zacks Consensus Estimate by an average of 7% in the trailing four quarters, including a 6.2% beat in Q2. Valued at around $27.5 billion, FANG has gained 37.3% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.