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Will PDC Energy (PDCE) Deliver a Beat This Earnings Season?

·4 min read

PDC Energy, Inc. PDCE is set to release fourth-quarter results on Feb 28. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $2.40 per share on revenues of $691.7 million.

Let’s delve into the factors that might have influenced this DJ Basin-focused oil producer’s performance in the December quarter. But it’s worth taking a look at PDC Energy’s previous-quarter results first.

Highlights of Q3 Earnings & Surprise History

In the last-reported quarter, this Denver, CO-based upstream player beat the consensus mark on better-than-anticipated volumes and higher commodity prices. PDC Energy had reported adjusted earnings per share of $2.33, comfortably beating the Zacks Consensus Estimate of $1.45. Revenues of $703.1 million generated by the firm had also come in above the consensus mark of $566 million.

PDCE topped the Zacks Consensus Estimate by an average of 51.1% in the trailing four quarters, including a 60.7% beat in Q3. This is depicted in the graph below:

PDC Energy, Inc. Price and EPS Surprise

PDC Energy, Inc. Price and EPS Surprise
PDC Energy, Inc. Price and EPS Surprise

PDC Energy, Inc. price-eps-surprise | PDC Energy, Inc. Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the fourth-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 118.2% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 148.3% increase from the year-ago period.

Factors to Consider

PDC Energy is expected to have benefited from the surge in oil and natural gas realizations. As a reflection of this price boost, the respective Zacks Consensus Estimate for the fourth-quarter average sales price for crude and natural gas is pegged at $76 per barrel and $4.08 per thousand cubic feet, up significantly from a year earlier when the company had fetched $40.43 and $1.58. The year-over-year improvement in realizations has most likely buoyed PDC Energy’s revenues and cash flows.

The company is also expected to have reaped the reward of higher production during the quarter. PDCE continues to churn out the impressive output from its assets in the resource-rich Wattenberg Field in Colorado. Consequently, the consensus mark for PDC Energy’s volume is pegged at 18,928 thousand barrels of oil equivalent (MBoe), rising from the prior-year quarter’s level of 16,574 Mboe MBOE/d.

On a somewhat bearish note, the increase in PDC Energy’s costs might have dented the company’s to-be-reported bottom-line numbers. PDCE’s total costs and expenses in the third quarter increased around 24% year over year to $320.7 million. The upward cost trajectory is likely to have continued in the fourth quarter due to cost inflation and higher production taxes.

What Does Our Model Say?

The proven Zacks model does not conclusively predict that PDC Energy is likely to beat fourth-quarter estimates. 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 -1.11%.

Zacks Rank: PDC Energy currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some firms that you may want to consider on the basis of our model:

Bank of Montreal BMO has an Earnings ESP of +0.66% and a Zacks Rank #3. The firm is scheduled to release earnings on Mar 1.

BMO is valued at around $74.4 billion. Bank of Montreal topped the Zacks Consensus Estimate in the trailing four quarters, with the average beat being 20.9%. BMO has gained some 38.6% in a year.

American Eagle Outfitters AEO has an Earnings ESP of +2.07% and a Zacks Rank #3. The firm is scheduled to release earnings on Mar 2.

AEO topped the Zacks Consensus Estimate in the trailing four quarters with the average beat being 12.7%, including a 26.7% beat in the last reported quarter. American Eagle Outfitters has lost around 20.5% in a year.

Casey’s General Stores, Inc. CASY has an Earnings ESP of +15.39% and a Zacks Rank #3. The firm is scheduled to release earnings on Mar 8.

CASY beat earnings estimates in three of the last four quarters — the earnings surprise being 20.1%, on average. Casey’s General Stores has lost around 9.6% in a year.

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


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American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report

Bank Of Montreal (BMO) : Free Stock Analysis Report

Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report

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