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Key Factors to Impact CNX Midstream's (CNXM) Q4 Earnings

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CNX Midstream Partners LP CNXM is set to release fourth-quarter 2019 results before the opening bell on Thursday, Jan 30. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 58 cents per unit on revenues of $75.8 million.

Let’s delve into the factors that might have influenced the partnership’s performance in the December quarter. But it’s worth taking a look at CNX Midstream’s previous quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, the natural gas midstream infrastructure operator beat the consensus mark on robust volume activity. CNX Midstream reported earnings of 58 cents per unit that surpassed the Zacks Consensus Estimate by 5 cents. The bottom line also increased 23.4% on a year-over-year basis. Revenues of $74 million were 21.3% higher than the year-ago quarter and beat the Zacks Consensus Estimate of $70 million.

As far as earnings surprises are concerned, the Canonsburg, PA-based partnership is on a solid footing, having gone past the Zacks Consensus Estimate in three of the last four reports, with the average positive surprise being 13.3%. This is depicted in the graph below:

CNX Midstream Partners LP Price and EPS Surprise


CNX Midstream Partners LP Price and EPS Surprise

CNX Midstream Partners LP price-eps-surprise | CNX Midstream Partners LP Quote

Factors to Consider This Quarter

CNX Midstream’s fourth-quarter bottom line is expected to reflect the impact of decline in gathered volumes. In the previous three-month period, the partnership’s gathered volumes of dry and wet gas fell to 848 and 630 billion British thermal units per day (BBtu/d), from 879 BBtu/d and 670 BBtu/d, respectively, in the second quarter. This trend most likely continued in the fourth quarter, primarily due to CNX Midstream’s efforts to adjust throughput on the back of lower natural gas prices. The Zacks Consensus Estimate for fourth-quarter dry and wet gas volumes are pegged at 766 BBtu/d and 584 BBtu/d, respectively.

But on a bullish note, improving profitability is likely to have lent support to CNX Midstream’s fourth-quarter earnings. The partnership managed to increase its third-quarter adjusted EBITDA by 25.5% year over year. CNX Midstream’s income is likely to have improved further in the to-be-reported quarter due to its focus on costs.

What Does Our Model Say?

The proven Zacks model does not conclusively show that CNX Midstream is likely to beat estimates in the fourth 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: CNX Midstream has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 58 cents.

Zacks Rank: CNX Midstream has a Zacks Rank of 3.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

While earnings beat looks uncertain for CNX Midstream, here are some firms from the energy space you may want to consider on the basis of our model, which shows that they have the right combination of elements to post earnings beat this season:

Chevron CVX has an Earnings ESP of +3.68% and a Zacks Rank #2. The company is scheduled to release earnings on Jan 31.

Magellan Midstream Partners, L.P. MMP has an Earnings ESP of +3.81% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Jan 30.

Patterson-UTI Energy, Inc. (PTEN - Free Report) has an Earnings ESP of +2.46% and is Zacks #3 Ranked. The company is scheduled to release earnings on Feb 6.

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