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What's in Store for Permian Resources Stock in Q3 Earnings?

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Key Takeaways

  • Permian Resources will report Q3 results on Nov. 5, with earnings estimated at 30 cents per share.
  • Q3 revenues are pegged at $1.34B, up 10.07% year over year on stronger production volumes.
  • Higher costs and inflationary pressures might have weighed on margins despite revenue growth.

Permian Resources Corporation (PR - Free Report) is set to release third-quarter results on Nov. 5. The bottom-line estimate for the to-be-reported quarter is pegged at a profit of 30 cents on revenues of $1.34 billion.

Let us delve into the factors that might have influenced this Midland, TX-based oil and gas exploration and production company’s results in the quarter. Before diving in, it is important to consider how PR performed last quarter.

Highlights of Q2 Earnings & Surprise History

In the last reported quarter, Permian Resources posted earnings in line with the Zacks Consensus Estimate. However, the bottom line declined from the year-ago quarter’s reported figure of 39 cents, caused by higher operating expenses and lower commodity prices. PR’s revenues of $1.2 billion missed the Zacks Consensus Estimate by 2.4%.

The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and fell short in one, resulting in an average surprise of 2.68%.

This is depicted in the graph below: 

PR’s Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter fiscal 2025 earnings has seen one upward revision and one downside movement over the past seven days.  The estimated figure indicates a 14.29% decline year over year. The Zacks Consensus Estimate for revenues implies year-over-year growth of 10.07%.

Factors to Consider Ahead of PR’s Q3 Release

The West Texas oil and gas operator makes money by exploring for, developing and producing oil and liquids-rich natural gas in the Permian Basin, then selling those hydrocarbons into domestic and international energy markets. PR’s revenues are likely to have increased in the quarter to be reported. The Zacks Consensus Estimate for third-quarter revenues is up from the year-ago quarter’s $1.22 billion. Based on our estimate, the company's total average daily net production is projected to rise 13.7% year over year, reaching 394,559 barrels of oil equivalent.

Adding to the bearish outlook, the increase in PR’s costs might have dented its to-be-reported bottom line. Inflationary pressures in drilling and completion services, higher lease operating expenses and increased capital spending are expected to have eroded margins, despite stronger production volumes. Rising input costs for labor, equipment and materials could have offset efficiency gains, limiting the benefit of higher revenues. Moreover, elevated infrastructure and transportation expenses in the Permian Basin are likely to have further compressed earnings, indicating that cost headwinds remain a significant drag on the company’s bottom line.

What Does Our Model Say About PR?

The proven Zacks model does not conclusively predict an earnings beat for the Permian-focused energy company this season. 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. This is not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

PR’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is 0.00%.

PR’s Zacks Rank:  PR currently carries a Zacks Rank #3.

Stocks to Consider

Here are some firms from the other space that you may want to consider, as these have the right combination of elements to post an earnings beat this season.

Delek US Holdings (DK - Free Report) has an Earnings ESP of +98.57% and a Zacks Rank #3 at present.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Valued at around $2.27 billion, DK has gained 138.1% in a year. Delek US Holdings is a diversified downstream energy company engaged in refining and logistics, with operations across the U.S. Gulf Coast and Southwest.  The firm is scheduled to release earnings on Nov. 7. Delek US Holdings’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the remaining one, delivering an average surprise of 16.06%.

ANI Pharmaceuticals (ANIP - Free Report) has an Earnings ESP of +10.55% and a Zacks Rank #2 at present. The firm is scheduled to release earnings on Nov. 7. Valued at around $1.97 billion, ANI Pharmaceuticals has gained 61.8% in a year.

The company develops, manufactures and markets high-quality branded and generic prescription pharmaceuticals, with a focus on niche and complex products. ANI Pharmaceuticals’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 22.66%.

Franklin Resources (BEN - Free Report) has an Earnings ESP of +1.05% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Nov. 7. Valued at around $11.74 billion, BEN has gained 12.1% in a year.

Franklin Resources, founded in 1947 and headquartered in San Mateo, CA, is a global asset management firm offering investment solutions across equity, fixed income and alternative markets. Through its subsidiaries, Franklin Resources serves a diverse client base and operates offices in major financial hubs worldwide.

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