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Is a Beat Likely for Enterprise Products (EPD) in Q1 Earnings?

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Enterprise Products Partners LP (EPD - Free Report) is set to report first-quarter 2022 results on May 2, before the opening bell.

In the last reported quarter, the midstream infrastructure provider reported adjusted earnings per limited partner unit of 52 cents, missing the Zacks Consensus Estimate of 54 cents. Weak earnings were driven by lower contributions from the Natural Gas Pipelines and Services, and NGL Pipelines & Services businesses.

Enterprise Products beat the Zacks Consensus Estimate in two of the prior four quarters, met once and missed once, the average earnings surprise being 6.6%. This is depicted in the graph below:

Let’s see how things have shaped up prior to the first-quarter earnings announcement.

Estimate Trend

The Zacks Consensus Estimate for first-quarter earnings of 52 cents per unit has seen three upward revisions and two downward movements in the past 30 days. The figure suggests a 18.8% year-over-year decline.

The Zacks Consensus Estimate for revenues is pegged at $10.8 billion for the quarter, indicating an increase of 18.1% from the year-ago reported figure.

Earnings Whispers

Our proven model conclusively predicts an earnings beat for Enterprise Products 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 the case here, as you will see below.

Earnings ESP: Earnings ESP for the partnership is +0.71%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Enterprise Products currently carries a Zacks Rank #3.

Factors to Consider

In the March-end quarter of 2022, oil and natural gas prices were significantly higher than the year-ago quarter. The favorable commodity price scenario has driven upstream investments, increasing production.

Higher production volumes have resulted in a significant increase in utilization rates on pipelines. Hence, rising commodity prices are likely to have changed the playing area for the midstream space in the first quarter.

The Zacks Consensus Estimate for first-quarter gross operating margin from Onshore Crude Oil Pipelines & Services is pegged at $425 million, suggesting an increase from $400 million reported a year ago. Hence, the improved performance of the crude pipeline is expected to have positioned the partnership well to generate higher profits in the first quarter.

Other Energy Stocks With Favorable Combination

Here are some other companies from the Energy space that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

EOG Resources (EOG - Free Report) has an Earnings ESP of +0.89% and is a Zacks #1 Ranked player at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources is scheduled to release first-quarter results on May 5. The Zacks Consensus Estimate for EOG’s quarterly earnings is pegged at $3.69 per share, suggesting an increase of 120.4% from the prior-year figure.

Callon Petroleum Company  has an Earnings ESP of +0.11% and it currently carries a Zacks Rank of 3.

Callon is scheduled to report the first-quarter results on May 4. The Zacks Consensus Estimate for CPE’s earnings is pegged at $3.28 per unit, suggesting a massive increase from the prior-year reported figure.

Murphy USA (MUSA - Free Report) has an Earnings ESP of +18.49% and it carries a Zacks Rank #2 at present.

Murphy USA is scheduled to release its first-quarter earnings on May 3. The Zacks Consensus Estimate for MUSA’s earnings is pegged at $2.65 per share, suggesting a massive improvement from the prior-year reported figure.

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


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