Can PDC Energy (PDCE) Q1 Earnings Maintain Positive Surprise?
PDC Energy, Inc. PDCE is set to release first-quarter results on May 4. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $3.18 per share on revenues of $738.9 million.
Let’s delve into the factors that might have influenced this DJ Basin-focused oil producer’s results in the March quarter. But it’s worth taking a look at PDCE’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last-reported quarter, the Denver, CO-based upstream operator handily beat the consensus mark on better-than-anticipated production volumes and higher commodity prices. PDCE had reported adjusted earnings per share of $2.86, well above the Zacks Consensus Estimate of $2.40. Revenues of $854.6 million generated by the firm also came in above the Zacks Consensus Estimate by 23.6%.
PDC Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 47.3%, on average. This is depicted in the graph below:
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 first-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 125.5% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 158.3% 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 first-quarter average sales price for crude and natural gas is pegged at $93 per barrel and $3.19 per thousand cubic feet, up significantly from a year earlier when the company had fetched $56.34 and $2.63. 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 an 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 17,600 thousand barrels of oil equivalent (MBoe), rising from the prior-year quarter’s level of 15,740 Mboe.
On a somewhat bearish note, the increase in PDC Energy’s costs might have dented the company’s to-be-reported bottom line. PDCE’s total costs and expenses in the fourth quarter increased around 23.8% year over year to $331.6 million. The upward cost trajectory is likely to have continued in the first quarter due to cost inflation and higher production taxes.
What Does Our Model Say?
The proven Zacks model does not conclusively show that PDC Energy is likely to beat estimates in the first 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: PDCE has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $3.18 per share each.
Zacks Rank: PDC Energy currently carries a Zacks Rank #1, 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 PDCE, here are some firms from the energy space that you may want to consider on the basis of our model:
EOG Resources, Inc. EOG has an Earnings ESP of +0.89% and a Zacks Rank #1. The firm is scheduled to release earnings on May 5.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, EOG has a projected earnings growth rate of 88.5%. Valued at around $68.4 billion, EOG has increased around 64.6% in a year.
Rattler Midstream LP RTLR has an Earnings ESP of +1.96% and a Zacks Rank #2. The firm is scheduled to release earnings on May 3.
For 2022, RTLR has a projected earnings growth rate of 34.9%. Valued at around $2 billion, Rattler Midstream has increased around 30.4% in a year.
Calumet Specialty Products Partners, L.P. CLMT has an Earnings ESP of +31.53% and is Zacks #2 Ranked. The firm is scheduled to release earnings on May 6.
CLMT is valued at around $1.1 billion. For 2022, the partnership has a projected earnings growth rate of 70.3%. Calumet has gained around 131.5% in a year.
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