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Will Higher Energy Prices Aid Civitas (CIVI) in Q3 Earnings?
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Civitas Resources (CIVI - Free Report) is set to release third-quarter results on Oct 31. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $3.64 per share on revenues of $878 million.
Let’s delve into the factors that might have influenced the Denver-Julesburg (DJ) Basin-focused upstream operator’s results in the September quarter. But it’s worth taking a look at Civitas’ previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the oil and gas producer beat the consensus mark primarily due to strong volumes. Civitas had reported adjusted earnings per share of $4.63, well above the Zacks Consensus Estimate of $4.25. Revenues of $1.2 billion generated by the firm had also come in 17.7% above the consensus mark.
CIVI missed the Zacks Consensus Estimate for earnings in two of the last four quarters, resulting in a negative earnings surprise of 23.5%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the third-quarter bottom line has been revised 3.7% upward in the past seven days. The estimated figure indicates a 103.4% increase year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 362.2% jump from the year-ago period.
Factors to Consider
Civitas Resources is expected to have benefited from the surge in hydrocarbon realizations. In the second quarter of 2022, the company’s average sales price for oil and natural gas increased by 65.4% and 101.7%, respectively, from the year-ago period. The uptick is most likely to have continued in the third quarter, with commodity prices remaining strong on the back of geopolitical tensions, strained supply and robust demand. This price boost is likely to have buoyed the revenues and cash flows of Civitas Resources.
The company is also expected to have reaped the reward of higher production during the quarter. CIVI continues to churn out an impressive output from its high-quality assets across the DJ Basin, where it focuses on growth through a combination of acquisitions and active drilling. In the previous three-month period, Civitas’ total output was up 10.2% quarter over quarter to 175,223 barrels of oil-equivalent per day. The uptick is expected to have continued in the to-be-reported quarter on the back of robust productivity from the company’s flagship fields and contribution from buyouts.
On a somewhat bearish note, Civitas’ total operating costs in the second quarter increased around 9.1% sequentially to $453.6 million. The upward cost trajectory is likely to have continued in the third quarter due to continued inflationary pressure. This is expected to have somewhat dented the company’s to-be-reported earnings.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Civitas Resources is likely to beat estimates in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. 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: Civitas Resources has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $3.64 per share each.
Zacks Rank: CIVI currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for Civitas Resources, here are some firms from the energy space that you may want to consider on the basis of our model:
Comstock Resources (CRK - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov 1.
For 2022, Comstock Resources has a projected earnings growth rate of 230.2%. Valued at around $3.9 billion, CRK has gained 65.8% in a year.
The Williams Companies (WMB - Free Report) has an Earnings ESP of +1.53% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 31.
For 2022, Williams has a projected earnings growth rate of 13.2%. Valued at around $6.6 billion, MUSA has gained 10.6% in a year.
ExxonMobil (XOM - Free Report) has an Earnings ESP of +1.39% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 28.
The Zacks Consensus Estimate for XOM’s 2022 earnings has been revised 3.8% upward over the past 60 days. Valued at around $444.3 billion, ExxonMobil has lost 64.5% in a year.
Image: Bigstock
Will Higher Energy Prices Aid Civitas (CIVI) in Q3 Earnings?
Civitas Resources (CIVI - Free Report) is set to release third-quarter results on Oct 31. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $3.64 per share on revenues of $878 million.
Let’s delve into the factors that might have influenced the Denver-Julesburg (DJ) Basin-focused upstream operator’s results in the September quarter. But it’s worth taking a look at Civitas’ previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the oil and gas producer beat the consensus mark primarily due to strong volumes. Civitas had reported adjusted earnings per share of $4.63, well above the Zacks Consensus Estimate of $4.25. Revenues of $1.2 billion generated by the firm had also come in 17.7% above the consensus mark.
CIVI missed the Zacks Consensus Estimate for earnings in two of the last four quarters, resulting in a negative earnings surprise of 23.5%, on average. This is depicted in the graph below:
Civitas Resources, Inc. Price and EPS Surprise
Civitas Resources, Inc. price-eps-surprise | Civitas Resources, Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the third-quarter bottom line has been revised 3.7% upward in the past seven days. The estimated figure indicates a 103.4% increase year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 362.2% jump from the year-ago period.
Factors to Consider
Civitas Resources is expected to have benefited from the surge in hydrocarbon realizations. In the second quarter of 2022, the company’s average sales price for oil and natural gas increased by 65.4% and 101.7%, respectively, from the year-ago period. The uptick is most likely to have continued in the third quarter, with commodity prices remaining strong on the back of geopolitical tensions, strained supply and robust demand. This price boost is likely to have buoyed the revenues and cash flows of Civitas Resources.
The company is also expected to have reaped the reward of higher production during the quarter. CIVI continues to churn out an impressive output from its high-quality assets across the DJ Basin, where it focuses on growth through a combination of acquisitions and active drilling. In the previous three-month period, Civitas’ total output was up 10.2% quarter over quarter to 175,223 barrels of oil-equivalent per day. The uptick is expected to have continued in the to-be-reported quarter on the back of robust productivity from the company’s flagship fields and contribution from buyouts.
On a somewhat bearish note, Civitas’ total operating costs in the second quarter increased around 9.1% sequentially to $453.6 million. The upward cost trajectory is likely to have continued in the third quarter due to continued inflationary pressure. This is expected to have somewhat dented the company’s to-be-reported earnings.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Civitas Resources is likely to beat estimates in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. 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: Civitas Resources has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $3.64 per share each.
Zacks Rank: CIVI currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for Civitas Resources, here are some firms from the energy space that you may want to consider on the basis of our model:
Comstock Resources (CRK - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov 1.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, Comstock Resources has a projected earnings growth rate of 230.2%. Valued at around $3.9 billion, CRK has gained 65.8% in a year.
The Williams Companies (WMB - Free Report) has an Earnings ESP of +1.53% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 31.
For 2022, Williams has a projected earnings growth rate of 13.2%. Valued at around $6.6 billion, MUSA has gained 10.6% in a year.
ExxonMobil (XOM - Free Report) has an Earnings ESP of +1.39% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 28.
The Zacks Consensus Estimate for XOM’s 2022 earnings has been revised 3.8% upward over the past 60 days. Valued at around $444.3 billion, ExxonMobil has lost 64.5% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.