What Will Helix Energy Solutions' (HLX) Q3 Earnings Unveil?
Helix Energy Solutions Group, Inc. HLX is set to release third-quarter results on Oct 23. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 19 cents per share on revenues of $356.4 million.
Let’s delve into the factors that might have influenced the leading specialty energy equipment supplier’s results in the September quarter. But it’s worth taking a look at HLX’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based provider of specialty services to offshore energy companies beat the consensus mark on strength in its Well Intervention and Robotics segments. HLX had reported adjusted earnings per share of 11 cents, comfortably beating the Zacks Consensus Estimate of 4 cents. Revenues of $308.8 million generated by the firm also came in 12.4% below the Zacks Consensus Estimate.
Helix Energy Solutions beat the Zacks Consensus Estimate for earnings in two of the last four quarters, met in one and missed in the other, resulting in an earnings surprise of (30.6%), on average. This is depicted in the graph below:
Helix Energy Solutions Group, Inc. Price and EPS Surprise
Helix Energy Solutions Group, Inc. price-eps-surprise | Helix Energy Solutions Group, Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the third-quarter bottom line remained unchanged in the past seven days. The estimated figure indicates a 290% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 30.8% increase from the year-ago period.
Factors to Consider
HLX is expected to have benefited from favorable market conditions in its Robotics segment. In the second quarter of 2023, the company’s profits for the unit amounted to $17.5 million. This compared to the year-ago income of $9.7 million. The uptick is most likely to have continued in the third quarter on the back of robust utilization and rates stemming from an uptick in activity.
Helix Energy Solutions’ decommissioning presence in the Gulf of Mexico shelf is also expected to have provided a positive backdrop to its upcoming report. Being the only firm to offer full field shallow water abandonment following the ‘Alliance Companies’ acquisition in July 2022, HLX is likely to have reaped the reward of the demand increases for such service. As such, Helix Energy’s segment income is expected to have increased from the 19.8 million recorded in the second quarter.
On a somewhat bearish note, a higher expense structure might have dampened some of the positive impacts. Helix Energy’s operating cost of sales in the second quarter increased some 54.6% year over year to $253.5 million. The upward cost trajectory is likely to have continued in the July-September period primarily due to higher labor outgo.
What Does Our Model Say?
The proven Zacks model does not conclusively show that HLX 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: Helix Energy has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 19 cents per share each.
Zacks Rank: HLX 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 Helix Energy Solutions Group, here are some firms from the energy space that you may want to consider on the basis of our model:
Matador Resources Company MTDR has an Earnings ESP of +6.04% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 24.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador Resources beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 11.8%, on average. Valued at around $7.6 billion, MTDR has gained 2.9% in a year.
Range Resources Corporation RRC has an Earnings ESP of +7.08% and a Zacks Rank #3. The firm is scheduled to release earnings on Oct 24.
Range Resources beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 21.7%, on average. Valued at around $8.4 billion, RRC has gained 27.4% in a year.
Oceaneering International, Inc. OII has an Earnings ESP of +7.93% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 25.
For 2023, Oceaneering International has a projected earnings growth rate of 167.7%. Valued at around $2.5 billion, OII has surged 182.9% in a year.
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Range Resources Corporation (RRC) : Free Stock Analysis Report
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Helix Energy Solutions Group, Inc. (HLX) : Free Stock Analysis Report
Matador Resources Company (MTDR) : Free Stock Analysis Report
