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What's in Store for Callon Petroleum's (CPE) Q1 Earnings?

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Callon Petroleum Company (CPE - Free Report) is scheduled to report first-quarter 2020 results on May 11, before the opening bell.

In the last reported quarter, the exploration and production company’s adjusted earnings of 23 cents per share beat the Zacks Consensus Estimate of 16 cents, primarily due to a surge in oil and gas production volumes and higher crude price realizations. The firm beat earnings estimates in the trailing four quarters, delivering average positive surprise of 20.9%.

Callon Petroleum Company Price and EPS Surprise

Callon Petroleum Company Price and EPS Surprise

Callon Petroleum Company price-eps-surprise | Callon Petroleum Company Quote

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

Trend in Estimate Revision

The Zacks Consensus Estimate for first-quarter earnings per share of 15 cents has witnessed one upward movement and six downward revisions in the past 60 days. This estimate is indicative of a 6.3% decrease from the year-ago reported figure.

The Zacks Consensus Estimate for first-quarter revenues is pegged at $344.8 million, suggesting an increase of 125.3% from the year-ago reported figure.

Factors to Note

Its focus on exploration and production of oil and gas resources in the Permian Basin is expected to reflect on Callon Petroleum’s first-quarter results. Permian has three major sub basins — Midland Basin, Delaware Basin and Central Basin Platform. Of these, the company has strong footprint in the Midland and Delaware Basins, which are likely to have supported first-quarter production. Moreover, the acquisition of Carrizo, which was closed last December, is expected to have led to a year-over-year surge in production.

The Zacks Consensus Estimate for average daily production volumes is pegged at 99,960 barrels of oil equivalent per day (Boe/d), indicating a significant rise from the year ago period’s 40,311 Boe/d. The same for natural gas output is pegged at 9,549 million cubic feet (MMcf), pointing to a rise from the year-ago quarter’s 4,619 MMcf. Moreover, the Zacks Consensus Estimate for crude oil production volumes is pegged at 5,776 thousand barrels (MBbls), implying an increase from the year-ago period’s 2,858 MBbls. The higher production level will be reflected in the company’s first-quarter results.

The Zacks Consensus Estimate for average sales price for oil is pegged at $48.15 per barrel, which indicates a decrease from the year-ago period’s $49.37. Also, the consensus estimate for average natural gas sales price of 48 cents per Mcf suggests a huge decrease from the first-quarter 2019 level of $2.59. These lower commodity price realizations are expected to have offset the gains from higher production. 

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Callon Petroleum 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 -31.47%. This is because the Most Accurate Estimate of 10 cents is lower than the Zacks Consensus Estimate of 15 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  

Zacks Rank: Callon Petroleum currently carries a Zacks Rank #3.

Energy Stocks With Favorable Combination

Though an earnings beat looks uncertain for Callon Petroleum, here are a few firms 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:

Oasis Midstream Partners LP (OMP - Free Report) has an Earnings ESP of +6.21% and holds a Zacks Rank #3. It is set to report first-quarter results on May 11. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco LP (SUN - Free Report) has an Earnings ESP of +14.75% and a Zacks Rank of 3. It is scheduled to report first-quarter results on May 11.

New Jersey Resources (NJR - Free Report) has an Earnings ESP of +3.86% and holds a Zacks Rank #3. It is set to report first-quarter results on May 8.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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