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Can Strong Margins Boost HF Sinclair (DINO) Q3 Earnings?
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HF Sinclair Corporation (DINO - Free Report) is set to release third-quarter results on Nov 7. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $4.20 per share on revenues of $8.5 billion.
Let’s delve into the factors that might have influenced this independent U.S. refiner’s results in the September quarter. But it’s worth taking a look at DINO’s previous-quarter performance first
Highlights of Q2 Earnings & Surprise History
In the last-reported quarter, the Dallas, TX-based downstream operator crushed the consensus mark on strong margins and solid execution. DINO had reported adjusted earnings per share of $5.59, significantly above the Zacks Consensus Estimate of $4.50. Revenues of $11.2 billion generated by the firm also came in above the Zacks Consensus Estimate by 40.1%.
HF Sinclair beat the Zacks Consensus Estimate for earnings in three of the last four quarters, resulting in an earnings surprise of 710.1%, 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 228.1% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests an 80.7% increase from the year-ago period.
Factors to Consider
DINO is expected to have benefited from the strength in refining margins. In the second quarter of 2022, the company’s refining gross margin of $36.36 per barrel jumped from $11.71 a year ago. Moreover, throughput rose from 444,730 barrels per day (bpd) in the second quarter of 2021 to 663,310 bpd.
Despite softening from the spectacular highs of the June quarter, the overall positive momentum is most likely to have continued in the third quarter, thanks to the strength in fuel demand on the back of rebounding road and airline travel, which pushed up crude differentials and margins. Consequently, the Zacks Consensus Estimate for HF Sinclair’s Refining segment operating income is pegged at $1 billion, more than quadrupling from the prior-year quarter’s profit of $219 million. This is likely to have buoyed the third-quarter results of HF Sinclair.
Why a Likely Positive Surprise?
Our proven model predicts a likely earnings beat for HF Sinclair 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.
DINO has an Earnings ESP of +1.17% and a Zacks Rank #1.
Other Stocks to Consider
HF Sinclair 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:
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 $3.8 billion, WHD has gained 22.2% in a year.
Diamondback Energy (FANG - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 7.
For 2022, Diamondback Energy has a projected earnings growth rate of 118.1%. Valued at around $26.9 billion, FANG has gained 41.8% in a year.
Calumet Specialty Products Partners, L.P. (CLMT - Free Report) has an Earnings ESP of +40.15% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 9.
Calumet Specialty Products Partners topped the Zacks Consensus Estimate by an average of 62% in the trailing four quarters, including a 92% beat in Q2. Valued at around $1.5 billion, CLMT has surged 94.9% in a year.
Image: Bigstock
Can Strong Margins Boost HF Sinclair (DINO) Q3 Earnings?
HF Sinclair Corporation (DINO - Free Report) is set to release third-quarter results on Nov 7. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $4.20 per share on revenues of $8.5 billion.
Let’s delve into the factors that might have influenced this independent U.S. refiner’s results in the September quarter. But it’s worth taking a look at DINO’s previous-quarter performance first
Highlights of Q2 Earnings & Surprise History
In the last-reported quarter, the Dallas, TX-based downstream operator crushed the consensus mark on strong margins and solid execution. DINO had reported adjusted earnings per share of $5.59, significantly above the Zacks Consensus Estimate of $4.50. Revenues of $11.2 billion generated by the firm also came in above the Zacks Consensus Estimate by 40.1%.
HF Sinclair beat the Zacks Consensus Estimate for earnings in three of the last four quarters, resulting in an earnings surprise of 710.1%, on average. This is depicted in the graph below:
HF Sinclair Corporation Price and EPS Surprise
HF Sinclair Corporation price-eps-surprise | HF Sinclair Corporation 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 228.1% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests an 80.7% increase from the year-ago period.
Factors to Consider
DINO is expected to have benefited from the strength in refining margins. In the second quarter of 2022, the company’s refining gross margin of $36.36 per barrel jumped from $11.71 a year ago. Moreover, throughput rose from 444,730 barrels per day (bpd) in the second quarter of 2021 to 663,310 bpd.
Despite softening from the spectacular highs of the June quarter, the overall positive momentum is most likely to have continued in the third quarter, thanks to the strength in fuel demand on the back of rebounding road and airline travel, which pushed up crude differentials and margins. Consequently, the Zacks Consensus Estimate for HF Sinclair’s Refining segment operating income is pegged at $1 billion, more than quadrupling from the prior-year quarter’s profit of $219 million. This is likely to have buoyed the third-quarter results of HF Sinclair.
Why a Likely Positive Surprise?
Our proven model predicts a likely earnings beat for HF Sinclair 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.
DINO has an Earnings ESP of +1.17% and a Zacks Rank #1.
Other Stocks to Consider
HF Sinclair 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:
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 $3.8 billion, WHD has gained 22.2% in a year.
Diamondback Energy (FANG - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 7.
For 2022, Diamondback Energy has a projected earnings growth rate of 118.1%. Valued at around $26.9 billion, FANG has gained 41.8% in a year.
Calumet Specialty Products Partners, L.P. (CLMT - Free Report) has an Earnings ESP of +40.15% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 9.
Calumet Specialty Products Partners topped the Zacks Consensus Estimate by an average of 62% in the trailing four quarters, including a 92% beat in Q2. Valued at around $1.5 billion, CLMT has surged 94.9% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.