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SM Energy (SM) Gears Up to Post Q4 Earnings: What's in Store?

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SM Energy Company (SM - Free Report) is set to report fourth-quarter 2021 results on Feb 24, after the closing bell.

In the last reported quarter, SM Energy comfortably beat the Zacks Consensus Estimate for the bottom line. It beat the consensus estimate in three of the prior four quarters, the average earnings surprise being 126.3%. This is depicted in the graph below:

SM Energy Company Price and EPS Surprise

SM Energy Company Price and EPS Surprise

SM Energy Company price-eps-surprise | SM Energy Company Quote

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

Trend in Estimate Revision

The Zacks Consensus Estimate for the company’s fourth-quarter earnings per share of 82 cents has witnessed one downward revision and one upward revision in the past 30 days. The estimated figure suggests a massive improvement from the prior-year number.

The consensus estimate for fourth-quarter revenues of $631.5 million indicates a 97.2% improvement from the year-ago reported figure.

Factors to Consider

The pricing scenario of oil in fourth-quarter 2021 improved drastically from the prior-year period, thanks to the rolling out of coronavirus vaccines. The pricing environment of natural gas also improved dramatically in the December quarter from the year-ago period. The rise in oil and natural gas prices is likely to have aided SM Energy’s upstream businesses.

The higher oil price has already benefited the bottom line of upstream energy players. ConocoPhillips (COP - Free Report) is one of them, as revealed from its already reported fourth-quarter results. ConocoPhillips’ strong fourth-quarter results were aided by increased production volumes and realized oil equivalent prices.

The average realized crude oil price of ConocoPhillips for the fourth quarter was $76.76 per barrel, reflecting an increase from the year-ago realization of $40.89.

Earnings Whispers

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

Earnings ESP: SM Energy’s Earnings ESP is -17.79%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: SM Energy currently sports a Zacks Rank #1.

Stocks to Consider

Here are a few firms that you may want to consider as these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Pembina Pipeline Corporation (PBA - Free Report) has an Earnings ESP of +20.43% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pembina Pipeline is scheduled to release fourth-quarter results on Feb 24. The Zacks Consensus Estimate for PBA’s earnings is pegged at 47 cents per share, suggesting an increase of 11.9% from the prior-year reported figure.

PDC Energy, Inc. has an Earnings ESP of +3.50% and a Zacks Rank of 3.

PDC Energy is scheduled to report fourth-quarter results on Feb 28. The Zacks Consensus Estimate for PDC Energy’s earnings is pegged at $2.40 per share, suggesting an improvement of 118.2% compared to the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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