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Factors to Note Ahead Of Coterra's (CTRA) Q2 Earnings Release
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Coterra Energy Inc. (CTRA - Free Report) is set to release second-quarter results on Aug 1. The Zacks Consensus Estimate for the to-be-reported quarter is a profit of 40 cents per share on revenues of $1.4 billion.
Let’s delve into the factors that might have influenced the oil and gas exploration and production firm’s performance in the June quarter. But it’s worth taking a look at CTRA’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based upstream energy company beat the consensus mark on stronger-than-expected production. CTRA reported adjusted earnings per share of 51 cents, outperforming the Zacks Consensus Estimate of 41 cents. Revenues of $1.4 billion also topped the Zacks Consensus Estimate by 3.6%.
Coterra Energy beat the Zacks Consensus Estimate in three of the last four quarters and missed in the other, resulting in an earnings surprise of 9.8%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the second-quarter bottom line has been revised downward by a penny over the past seven days. The estimated figure indicates a 2.6% improvement year over year. The Zacks Consensus Estimate for revenues suggests a 13.6% increase from the year-ago reported number.
Factors to Consider
Natural gas prices have plummeted, significantly reducing Coterra Energy's revenue streams. The surge in Permian oil drilling has created an abundance of affiliated gas, pushing prices down. This trend is expected to have continued throughout the second quarter, leading to a bearish outlook on Coterra’s financial performance in the short term. Low prices have led to a substantial cut in the company’s natural gas capital expenditures, especially in the Marcellus Shale operations, indicating a drop in the fuel’s production.
Consequently, the Zacks Consensus Estimate for the company’s second-quarter natural gas volume is pegged at 2,715 million cubic feet (MMCF) per day, down significantly from the year-ago quarter’s level of 2,904 MMCF. Investors should note that natural gas accounts for around 70% of CTRA’s total output.
On the contrary, Coterra’s strategic shift toward its oil-rich assets in the Delaware Basin while reducing capex on natural gas, is expected to have positioned the company to capitalize on rising oil prices. In the first quarter, the company’s total production exceeded expectations, with oil volumes surpassing the midpoint of guidance by 6%. With CTRA having increased its full-year oil production guidance by 2% to 3%, this uptick is likely to have continued in the second quarter. As such, the consensus mark for Coterra Energy’s crude output is 106 thousand barrels per day, implying an 11% increase from the second quarter of 2023.
What Does Our Model Say?
The proven model does not conclusively predict an earnings beat for CTRA for the second 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: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -1.53%.
Zacks Rank: CTRA currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Coterra Energy, here are some firms from the energy space that you may want to consider on the basis of our model:
Over the past 90 days, the Zacks Consensus Estimate for TC Energy’s 2024 earnings has moved up 4.5%. Valued at around $42 billion, TRP has gained 16.8% in a year.
Canadian Natural Resources Limited (CNQ - Free Report) has an Earnings ESP of +9.84% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 1.
Canadian Natural Resources has a trailing four-quarter earnings surprise of 5.5%, on average. Valued at around $73.2 billion, CNQ has gained 12.1% in a year.
MPLX LP (MPLX - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 6.
MPLX’s expected EPS growth rate for three to five years is currently 5%, which compares favorably with the industry's growth rate of 4.5%. Valued at around $43.8 billion, MPLX has gained 21.1% in a year.
Image: Bigstock
Factors to Note Ahead Of Coterra's (CTRA) Q2 Earnings Release
Coterra Energy Inc. (CTRA - Free Report) is set to release second-quarter results on Aug 1. The Zacks Consensus Estimate for the to-be-reported quarter is a profit of 40 cents per share on revenues of $1.4 billion.
Let’s delve into the factors that might have influenced the oil and gas exploration and production firm’s performance in the June quarter. But it’s worth taking a look at CTRA’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based upstream energy company beat the consensus mark on stronger-than-expected production. CTRA reported adjusted earnings per share of 51 cents, outperforming the Zacks Consensus Estimate of 41 cents. Revenues of $1.4 billion also topped the Zacks Consensus Estimate by 3.6%.
Coterra Energy beat the Zacks Consensus Estimate in three of the last four quarters and missed in the other, resulting in an earnings surprise of 9.8%, on average. This is depicted in the graph below:
Coterra Energy Inc. Price and EPS Surprise
Coterra Energy Inc. price-eps-surprise | Coterra Energy Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line has been revised downward by a penny over the past seven days. The estimated figure indicates a 2.6% improvement year over year. The Zacks Consensus Estimate for revenues suggests a 13.6% increase from the year-ago reported number.
Factors to Consider
Natural gas prices have plummeted, significantly reducing Coterra Energy's revenue streams. The surge in Permian oil drilling has created an abundance of affiliated gas, pushing prices down. This trend is expected to have continued throughout the second quarter, leading to a bearish outlook on Coterra’s financial performance in the short term. Low prices have led to a substantial cut in the company’s natural gas capital expenditures, especially in the Marcellus Shale operations, indicating a drop in the fuel’s production.
Consequently, the Zacks Consensus Estimate for the company’s second-quarter natural gas volume is pegged at 2,715 million cubic feet (MMCF) per day, down significantly from the year-ago quarter’s level of 2,904 MMCF. Investors should note that natural gas accounts for around 70% of CTRA’s total output.
On the contrary, Coterra’s strategic shift toward its oil-rich assets in the Delaware Basin while reducing capex on natural gas, is expected to have positioned the company to capitalize on rising oil prices. In the first quarter, the company’s total production exceeded expectations, with oil volumes surpassing the midpoint of guidance by 6%. With CTRA having increased its full-year oil production guidance by 2% to 3%, this uptick is likely to have continued in the second quarter. As such, the consensus mark for Coterra Energy’s crude output is 106 thousand barrels per day, implying an 11% increase from the second quarter of 2023.
What Does Our Model Say?
The proven model does not conclusively predict an earnings beat for CTRA for the second 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: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -1.53%.
Zacks Rank: CTRA currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Coterra Energy, here are some firms from the energy space that you may want to consider on the basis of our model:
TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 90 days, the Zacks Consensus Estimate for TC Energy’s 2024 earnings has moved up 4.5%. Valued at around $42 billion, TRP has gained 16.8% in a year.
Canadian Natural Resources Limited (CNQ - Free Report) has an Earnings ESP of +9.84% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 1.
Canadian Natural Resources has a trailing four-quarter earnings surprise of 5.5%, on average. Valued at around $73.2 billion, CNQ has gained 12.1% in a year.
MPLX LP (MPLX - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 6.
MPLX’s expected EPS growth rate for three to five years is currently 5%, which compares favorably with the industry's growth rate of 4.5%. Valued at around $43.8 billion, MPLX has gained 21.1% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.