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Ecopetrol (EC) Gears Up for Q2 Earnings: What's in Store?

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Ecopetrol SA (EC - Free Report) is set to report second-quarter 2024 earnings on Aug 13, after the closing bell.

In the last reported quarter, the company’s earnings of 50 cents per share missed the Zacks Consensus Estimate of 59 cents. EC’s earnings beat the Zacks Consensus Estimate in one of the trailing four quarters and missed the same twice, delivering an average negative surprise of 3.58%. This is depicted in the graph below.

Ecopetrol S.A. Price and EPS Surprise

Ecopetrol S.A. Price and EPS Surprise

Ecopetrol S.A. price-eps-surprise | Ecopetrol S.A. Quote

Estimate Trend

The Zacks Consensus Estimate for second-quarter earnings per share of 59 cents has witnessed one downward movement over the past 30 days. The estimated figure suggests an improvement of 31.1% from the year-ago quarter’s reported number.

The Zacks Consensus Estimate for second-quarter revenues of $8.7 billion indicates an 11.7% increase from the year-ago reported figure.

Factors to Consider

According to the U.S. Energy Information Administration, the average spot prices for West Texas Intermediate crude at Cushing, OK, were $85.35 per barrel in April, $80.02 in May and $79.77 in June. EIA data also suggested that the average spot prices for Europe Brent crude spot price were $89.94 per barrel in April, $81.75 in May and $82.25 in June. This indicates that the crude pricing environment in the second quarter was highly favorable for exploration and production activities for Ecopetrol – the leading integrated energy player in Colombia.

Despite this favorable pricing, drilling activities declined internationally. Baker Hughes Company (BKR - Free Report) reported that in the international market, the count of rigs was 963 in the second quarter, which fell from the prior quarter. The rotary rig count, issued by Baker Hughes, is usually published in major newspapers and trade publications.

The decrease in drilling activities in international markets suggests that explorers and producers like Ecopetrol spent less on upstream activities, thereby affecting production.

From the midstream business, the company is likely to have generated stable fee-based revenues since transportation activities have lower exposure to commodity price volatility.

Earnings Whispers

Our proven model does not indicate an earnings beat for Ecopetrol 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: EC’s Earnings ESP is -22.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Here are two firms that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.

Affirm Holdings Inc (AFRM - Free Report) currently has an Earnings ESP of +19.64% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AFRM is scheduled to release earnings on Aug 28. The Zacks Consensus Estimate for its loss is pegged at 45 cents per share, suggesting an almost 35% improvement from the prior-year reported figure.

Abercrombie & Fitch Co. (ANF - Free Report) presently has an Earnings ESP of +9.09% and a Zacks Rank #1.

Abercrombie & Fitch is scheduled to release earnings on Aug 28. The Zacks Consensus Estimate for its earnings is pegged at $2.11 per share, suggesting a 92% increase from the prior-year reported figure.

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

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