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Key Factors to Consider Before BP's Q3 Earnings Announcement
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BP plc (BP - Free Report) is set to report third-quarter 2024 earnings on Oct. 29.
Let us delve into the factors that are anticipated to have affected this integrated energy major’s quarterly performance. However, before that, it would be worth reviewing BP’s performance in the previous quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Highlights of Q2 Earnings
In the last reported quarter, the company’s earnings of $1 per American Depositary Share on a replacement-cost basis (excluding non-operating items) beat the Zacks Consensus Estimate of 92 cents. Higher volumes and improved liquids realizations primarily led to strong quarterly earnings. Increased total refinery throughputs also aided quarterly earnings.
BP’s earnings missed the Zacks Consensus Estimate in three of the trailing four quarters and beat the same once, delivering an average negative surprise of 3.8%. This is depicted in the graph below.
The Zacks Consensus Estimate for third-quarter earnings per share of 79 cents has witnessed one upward and three downward revisions over the past 30 days. The estimated figure suggests a significant decline from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for third-quarter revenues of $63.6 billion indicates a 17.7% increase from the year-ago reported figure.
Factors to Consider
Per data provided by the U.S. Energy Information Administration, the average monthly price of West Texas Intermediate crude in July, August and September 2024 was $81.80, $76.68 and $70.24 per barrel, respectively. Although the prices were not as high as in the year-ago quarter, the commodity prices were impressive and healthy, higher than the $70-per-barrel mark. Like oil, natural gas prices in the September-end quarter were also lower year over year.
On the production front, BP expects its oil and gas production in the third quarter of 2024 to be lower than that reported in the second quarter, including from regions where they typically earn higher profits. The company mentioned it alongside its second-quarter results. The reduction in output, especially from more profitable areas, could put downward pressure on its third-quarter earnings.
For its fuel sales business, BP had expected the third-quarter fuel profit margin to fluctuate due to supply costs, but it anticipated the overall sales volume to be higher due to seasonal factors. While higher volumes are likely to have boosted sales, fluctuating margins due to supply cost changes are anticipated to have limited profit growth in the third quarter.
Thus, lower commodity prices and production are likely to have hurt its bottom line in the to-be-reported quarter.
Earnings Whispers
Our proven model does not indicate an earnings beat for BP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: BP’s Earnings ESP is 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at earnings of 79 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are three firms that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.
Cheniere Energy is scheduled to release third-quarter earnings on Oct. 31. The Zacks Consensus Estimate for LNG’s earnings is pegged at $1.87 per share, suggesting a 21.1% decrease from the prior-year reported figure.
TC Energy Corporation (TRP - Free Report) presently has an Earnings ESP of +4.57% and a Zacks Rank #3.
TC Energy is scheduled to release third-quarter earnings on Nov. 7. The Zacks Consensus Estimate for TRP’s earnings is pegged at 69 cents per share, suggesting an 8% decrease from the prior-year reported figure.
ProPetro Holding Corp. (PUMP - Free Report) currently has an Earnings ESP of +60% and a Zacks Rank #3.
ProPetro Holding is scheduled to release third-quarter earnings on Oct. 30. The Zacks Consensus Estimate for PUMP’s earnings is pegged at 3 cents per share, suggesting a 90.3% decrease from the prior-year reported figure.
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Key Factors to Consider Before BP's Q3 Earnings Announcement
BP plc (BP - Free Report) is set to report third-quarter 2024 earnings on Oct. 29.
Let us delve into the factors that are anticipated to have affected this integrated energy major’s quarterly performance. However, before that, it would be worth reviewing BP’s performance in the previous quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Highlights of Q2 Earnings
In the last reported quarter, the company’s earnings of $1 per American Depositary Share on a replacement-cost basis (excluding non-operating items) beat the Zacks Consensus Estimate of 92 cents. Higher volumes and improved liquids realizations primarily led to strong quarterly earnings. Increased total refinery throughputs also aided quarterly earnings.
BP’s earnings missed the Zacks Consensus Estimate in three of the trailing four quarters and beat the same once, delivering an average negative surprise of 3.8%. This is depicted in the graph below.
BP p.l.c. Price and EPS Surprise
BP p.l.c. price-eps-surprise | BP p.l.c. Quote
Estimate Trend
The Zacks Consensus Estimate for third-quarter earnings per share of 79 cents has witnessed one upward and three downward revisions over the past 30 days. The estimated figure suggests a significant decline from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for third-quarter revenues of $63.6 billion indicates a 17.7% increase from the year-ago reported figure.
Factors to Consider
Per data provided by the U.S. Energy Information Administration, the average monthly price of West Texas Intermediate crude in July, August and September 2024 was $81.80, $76.68 and $70.24 per barrel, respectively. Although the prices were not as high as in the year-ago quarter, the commodity prices were impressive and healthy, higher than the $70-per-barrel mark. Like oil, natural gas prices in the September-end quarter were also lower year over year.
On the production front, BP expects its oil and gas production in the third quarter of 2024 to be lower than that reported in the second quarter, including from regions where they typically earn higher profits. The company mentioned it alongside its second-quarter results. The reduction in output, especially from more profitable areas, could put downward pressure on its third-quarter earnings.
For its fuel sales business, BP had expected the third-quarter fuel profit margin to fluctuate due to supply costs, but it anticipated the overall sales volume to be higher due to seasonal factors. While higher volumes are likely to have boosted sales, fluctuating margins due to supply cost changes are anticipated to have limited profit growth in the third quarter.
Thus, lower commodity prices and production are likely to have hurt its bottom line in the to-be-reported quarter.
Earnings Whispers
Our proven model does not indicate an earnings beat for BP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: BP’s Earnings ESP is 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at earnings of 79 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are three firms that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.
Cheniere Energy, Inc. (LNG - Free Report) currently has an Earnings ESP of +5.35% and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cheniere Energy is scheduled to release third-quarter earnings on Oct. 31. The Zacks Consensus Estimate for LNG’s earnings is pegged at $1.87 per share, suggesting a 21.1% decrease from the prior-year reported figure.
TC Energy Corporation (TRP - Free Report) presently has an Earnings ESP of +4.57% and a Zacks Rank #3.
TC Energy is scheduled to release third-quarter earnings on Nov. 7. The Zacks Consensus Estimate for TRP’s earnings is pegged at 69 cents per share, suggesting an 8% decrease from the prior-year reported figure.
ProPetro Holding Corp. (PUMP - Free Report) currently has an Earnings ESP of +60% and a Zacks Rank #3.
ProPetro Holding is scheduled to release third-quarter earnings on Oct. 30. The Zacks Consensus Estimate for PUMP’s earnings is pegged at 3 cents per share, suggesting a 90.3% decrease from the prior-year reported figure.