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Can MPLX (MPLX) Keep the Earnings Surprise Streak Alive in Q3?

·4 min read

MPLX LP MPLX is set to report third-quarter 2020 results on Nov 2, before the opening bell.

In the last-reported quarter, the partnership’s earnings of 58 cents per unit beat the Zacks Consensus Estimate of 48 cents. Moreover, the midstream energy firm managed to beat the consensus estimate in three of the prior four quarters, the average earnings surprise being 5.8%.

MPLX LP Price and EPS Surprise

 

MPLX LP Price and EPS Surprise
MPLX LP Price and EPS Surprise

MPLX LP price-eps-surprise | MPLX LP Quote

Let’s see how things have shaped up prior to the upcoming earnings announcement.

Trend in Estimate Revisions

The Zacks Consensus Estimate for third-quarter earnings of 59 cents has seen four upward revisions and no downward movement in the past 60 days. The figure suggests a year-over-year decrease of 3.3%.

Further, the Zacks Consensus Estimate for revenues is pegged at $2 billion for the quarter, indicating a deterioration of 11.4% from the year-ago reported figure.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for MPLX 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.

Earnings ESP: MPLX has an Earnings ESP of +0.56%. This is because the Most Accurate Estimate for the quarter’s earnings is 60 cents per unit while the Zacks Consensus Estimate is pegged at 59 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The partnership currently carries a Zacks Rank #3.

Factors Driving the Better-Than-Expected Earnings

Findlay, OH-based MPLX is engaged in providing a wide range of midstream energy services, including fuel distribution solutions. Therefore, it is least exposed to commodity price fluctuations and is expected to have generated stable fee-based revenues in the third quarter from long-term contracts.

Backed by its huge network of crude oil and refined product pipelines and associated storage assets, the partnership is likely to have generated higher income from the Logistics and Storage unit. In fact, the Zacks Consensus Estimate for the partnership’s income from the segment is pegged at $839 million, suggesting a rise from the year-ago $713 million.

Moreover, the consensus estimate for the partnership’s earnings from the Gathering and Processing segment is pegged at $385 million, suggesting an improvement from $213 million in the September quarter of 2019. The outperformance is likely to have been aided by the partnership’s operating interest in several natural gas gathering systems and processing complexes.

Other Stocks That Warrant a Look

Here are some other firms that you may want to consider as these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Sunoco LP SUN has an Earnings ESP of +8.68% and is a Zacks #1 Ranked player. The partnership is scheduled to release third-quarter results on Nov 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources, Inc. EOG has an Earnings ESP of +29.17% and a Zacks Rank of 3. It is scheduled to report third-quarter results on Nov 5.

DCP Midstream Partners, LP DCP has an Earnings ESP of +4.77% and a Zacks Rank #1. The partnership is scheduled to release third-quarter earnings on Nov 4.

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Sunoco LP (SUN) : Free Stock Analysis Report
 
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
 
MPLX LP (MPLX) : Free Stock Analysis Report
 
DCP Midstream Partners, LP (DCP) : Free Stock Analysis Report
 
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