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What's in Store for Antero Midstream's (AM) Q4 Earnings?

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Antero Midstream Corporation (AM - Free Report) is scheduled to report fourth-quarter 2019 results on Feb 12, after the closing bell.

In the last reported quarter, the leading provider of integrated and customized midstream services’ adjusted earnings of 39 cents per share beat the Zacks Consensus Estimate of 20 cents, primarily due to growth in gathering, compression and Clearwater treatment volumes. The firm beat earnings estimates once in the trailing four quarters, delivering average negative surprise of 2.8%.

Antero Midstream Price and EPS Surprise

Let’s see how things have shaped up for this announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for fourth-quarter earnings per share of 23 cents has witnessed no upward movement but one downward revision by firms in the past 30 days. This estimate is indicative of a 130% increase from the year-ago reported figure.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $273.5 million, suggesting a surge of 528.9% from the year-ago reported figure.

Factors to Note

Antero Midstream has more than 370 miles of low- and high-pressure gathering pipelines. It has a compression capacity of more than 2.7 billion cubic feet per day. Through services provided by these infrastructures, Antero Midstream generates stable fee-based revenues under long-term contracts, which are likely to have buoyed fourth-quarter earnings.

The Zacks Consensus Estimate for average daily volumes of compression is pegged at 2,340 million cubic feet per day (MMcf/d), indicating a rise from the year ago period’s 2,215 MMcf/d. However, the metric suggests a decline from the third-quarter 2019 level of 2,434 MMcf/d.

The Zacks Consensus Estimate for average daily volumes of fresh water delivery is pegged at 154 thousand barrels per day (MBbls/d), implying an increase from the year-ago period’s 136 MBbls/d. The same for high pressure gathering volumes is pegged at 2,562 MMcf/d, pointing to a decrease from the year-ago quarter’s 2,569 MMcf/d.

The Zacks Consensus Estimate for average daily volumes of low pressure gathering is pegged at 2,623 MMcf/d, which indicates an increase from the year-ago period’s 2,602 MMcf/d. However, the metric suggests a decrease from the third-quarter 2019 level of 2,698 MMcf/d.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Antero Midstream this time around. 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. That is not the case here as you will see below.

Earnings ESP: Earnings ESP for the company is -20.00%. This is because the Most Accurate Estimate of 18 cents is lower than the Zacks Consensus Estimate of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  

Zacks Rank: Antero Midstream currently carries a Zacks Rank #3.

Energy Stocks With Favorable Combination

While earnings beat looks uncertain for Antero Midstream, here are some companies from the energy space that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Cenovus Energy Inc. (CVE - Free Report) has an Earnings ESP of +9.65% and a Zacks Rank #2. The company is set to release quarterly earnings on Feb 12. You can see the complete list of today’s Zacks #1 Rank stocks here.

Antero Resources Corporation (AR - Free Report) has an Earnings ESP of +6.49% and a Zacks Rank #2. The company is set to release quarterly earnings on Feb 12.

Continental Resources, Inc. (CLR - Free Report) has an Earnings ESP of +2.79% and a Zacks Rank #3. The company is set to release quarterly earnings on Feb 26.

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