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USA Compression (USAC) to Report Q4 Earnings: What to Expect

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USA Compression Partners, LP USAC is set to release fourth-quarter 2019 results before the opening bell on Tuesday, Feb 18. The current Zacks Consensus Estimate for the to-be-reported quarter is a loss of 2 cents per unit on revenues of $176.5 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 USA Compression Partners’ previous quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, the natural gas compression services provider beat the consensus mark on strong demand for bigger horsepower compression units. USA Compression Partners reported net income of 2 cents per unit that surpassed the Zacks Consensus Estimate by 6 cents. The bottom line also turned around from the year-ago loss of 10 cents. Revenues of $175.8 million were 4% higher than the year-ago quarter and beat the Zacks Consensus Estimate of $172 million.

As far as earnings surprises are concerned, the Austin, TX-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 80%. This is depicted in the graph below:

USA Compression Partners, LP Price and EPS Surprise


USA Compression Partners, LP Price and EPS Surprise

USA Compression Partners, LP price-eps-surprise | USA Compression Partners, LP Quote

Factors to Consider

Regular deployment of compression assets by the midstream and upstream customers is likely to have contributed to USA Compression Partners’ fourth-quarter bottom line. In the third quarter, the partnership’s revenue-generating horsepower capacity increased 1.4% compared with last year’s corresponding period to 3,258,125 horsepower, a trend that most likely continued in the fourth quarter because of sustained demand for large horsepower applications. Consequently, the Zacks Consensus Estimate for fourth-quarter revenue-generating horsepower capacity is pegged at 3,284,000 horsepower, indicating an increase from the year-ago reported figure of 3,274,201.

But on a bearish note, utilization headwinds might have dampened the performance of this partnership, which helps natural gas to move from the wellhead (where it is produced) to the end market (where it is demanded). The Zacks Consensus Estimate for USA Compression Partners’ fourth-quarter average horsepower utilization rate is pegged at 89%, indicating a decline from 95.6% achieved a year ago due to timing issues associated with some smaller horsepower equipment.    

What Does Our Model Say?

The proven Zacks model does not conclusively predict an earnings beat for USA Compression Partners 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  an earnings beat. 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: USA Compression Partners has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 2 cents.

Zacks Rank: USA Compression Partners has a Zacks Rank of 3.

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

Stocks to Consider

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:

Enbridge Inc. (ENB - Free Report) has an Earnings ESP of +2.26% and a Zacks Rank #2. The company is scheduled to release earnings on Feb 14.

Cimarex Energy Co. XEC has an Earnings ESP of +1.45% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Feb 19.

The Williams Companies, Inc. WMB has an Earnings ESP of +6.78% and is Zacks #3 Ranked. The company is scheduled to release earnings on Feb 19.

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