Civitas (CIVI) Q2 Earnings Preview: What Investors Can Expect
Civitas Resources, Inc. CIVI is set to release second-quarter results on Aug 2. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.69 per share on revenues of $637.2 million.
Let’s delve into the factors that might have influenced the Denver-Julesburg (DJ) Basin-focused upstream operator’s results in the June quarter. But it’s worth taking a look at CIVI’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, the oil and gas producer player beat the consensus mark on impressive production that came in toward the high end of the guidance. CIVI had reported adjusted earnings per share of $2.25, beating the Zacks Consensus Estimate of $2.01. However, revenues of $656 million generated by the firm came in 2% below the Zacks Consensus Estimate due to lower commodity prices.
Civitas Resources beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two, resulting in an earnings surprise of 4.5%, 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 second-quarter bottom line has been revised 13.3% downward in the past seven days. The estimated figure indicates a 63.5% drop year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 44.7% decrease from the year-ago period.
Factors to Consider
The company is 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 slightly year over quarter to 159,429 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 contributions from buyouts.
However, as a counter to its production gains, Civitas Resources is expected to have been weighed down by the drop in hydrocarbon realizations. In the first quarter of 2023, the company’s average sales price for oil and natural gas decreased by 21% and 9%, respectively, from the year-ago period. The downtrend is most likely to have continued in the second quarter, with commodity prices remaining under pressure with investors opting for safer assets due to concerns about a slowing global economy.
What Does Our Model Say?
The proven Zacks model does not conclusively show that CIVI is likely to beat estimates in 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: Civitas Resources has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.69 per share each.
Zacks Rank: CIVI currently carries a Zacks Rank #2, 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:
Murphy USA MUSA has an Earnings ESP of +1.80% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA has a trailing four-quarter earnings surprise of 15.6%, on average. Over the past 60 days, MUSA saw the Zacks Consensus Estimate for 2023 move up 7.1%. Valued at around $6.6 billion, the company has gained 5.8% in a year.
Pembina Pipeline Corporation PBA has an Earnings ESP of +1.48% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 3.
Pembina Pipeline beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of 30.7%, on average. Valued at around $17.2 billion, PBA has lost 17% in a year.
Targa Resources Corp. TRGP has an Earnings ESP of +0.36% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug 3.
The 2023 Zacks Consensus Estimate for TRGP indicates 31.4% year-over-year earnings per share growth. Over the past 30 days, the company saw the Zacks Consensus Estimate for 2023 move up 12.3%. Valued at around $18.2 billion, Targa Resources has gained 17.8% in a year.
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Murphy USA Inc. (MUSA) : Free Stock Analysis Report
Pembina Pipeline Corp. (PBA) : Free Stock Analysis Report
Targa Resources, Inc. (TRGP) : Free Stock Analysis Report
Civitas Resources, Inc. (CIVI) : Free Stock Analysis Report
