USA Compression (USAC) to Report Q3 Earnings: What to Expect
USA Compression Partners, LP USAC is set to release third-quarter results on Oct 31. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 11 cents per unit on revenues of $208.4 million.
Let’s delve into the factors that might have influenced the partnership’s results in the September quarter. But it’s worth taking a look at USAC’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the natural gas compression services provider beat the consensus mark on improved pricing and utilization. USA Compression Partners had reported adjusted earnings per unit of 8 cents, which came in a penny above the Zacks Consensus Estimate. Revenues of $206.9 million generated by the firm had also come in 4.2% higher than the consensus mark.
USAC missed the Zacks Consensus Estimate for earnings in three of the last four quarters and beat in the other, resulting in an earnings surprise of (150.6%), on average. This is depicted in the graph below:
USA Compression Partners, LP Price and EPS Surprise
USA Compression Partners, LP price-eps-surprise | USA Compression Partners, LP Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the third-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 466.7% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 16% increase from the year-ago period.
Factors to Consider
Regular deployment of compression assets by the midstream and upstream customers is likely to have contributed to USA Compression Partners’ third-quarter bottom line. In the second quarter, the partnership’s revenue-generating horsepower capacity increased 9.3% compared with last year’s corresponding period to 3,309,758 horsepower, a trend that most likely continued in the September quarter because of sustained demand for large horsepower applications. Consequently, our model estimates third-quarter revenue-generating horsepower to reach 3,335,879 horsepower, indicating a 7.9% increase from the year-ago reported figure of 3,090,910.
But on a bearish note, cost headwinds might have dampened the performance of this partnership, which helps natural gas to move from the wellhead (where it is produced) to the end market (where it is demanded). According to our model, USA Compression Partners’ third-quarter operating expense is pegged at $61.6 million, indicating a 3.6% rise from the year-ago figure due to the prevailing inflationary environment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that USA Compression Partners 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: USA Compression Partners has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 11 cents per unit each.
Zacks Rank: USAC 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 USA Compression Partners, here are some firms from the energy space that you may want to consider on the basis of our model:
Diamondback Energy FANG has an Earnings ESP of +0.84% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov 6.
Over the past 90 days, Diamondback Energy saw the Zacks Consensus Estimate for 2023 move up 6.4%. Valued at around $28.6 billion, FANG has gained 1.9% in a year.
Civitas Resources CIVI has an Earnings ESP of +7.46% and a Zacks Rank #2. The firm is scheduled to release earnings on Nov 7.
Civitas Resources 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 2.7%, on average. Valued at around $7 billion, CIVI has gained 7.4% in a year.
Delek US Holdings DK has an Earnings ESP of +5.26% and a Zacks Rank #2. The firm is scheduled to release earnings on Nov 7.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 90 days, Delek US Holdings saw the Zacks Consensus Estimate for 2023 move up 26.5%. Valued at around $1.6 billion, DK has lost 14.7% in a year.
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Delek US Holdings, Inc. (DK) : Free Stock Analysis Report
USA Compression Partners, LP (USAC) : Free Stock Analysis Report
Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report
Civitas Resources, Inc. (CIVI) : Free Stock Analysis Report
