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What's in the Offing for SM Energy's (SM) Earnings in Q2?

·4 min read

SM Energy Company SM is set to report second-quarter 2022 results on Aug 3, after the closing bell.

In the last reported quarter, the upstream firm’s adjusted earnings of $1.98 per share missed the Zacks Consensus Estimate of $2.07, owing to increased total operating expenses. The negatives were offset partially by higher oil-equivalent production volumes and commodity price realizations.

In the prior four quarters, SM Energy’s bottom line beat the Zacks Consensus Estimate thrice and missed the same once, the average earnings surprise being 133.3%. This is depicted in the graph below:

SM Energy Company Price and EPS Surprise

 

SM Energy Company Price and EPS Surprise
SM Energy Company Price and EPS Surprise

SM Energy Company price-eps-surprise | SM Energy Company Quote

Let’s delve into the factors that are anticipated to have influenced the upstream energy player’s performance in the June-end quarter.

Estimate Trend

The Zacks Consensus Estimate for SM Energy’s second-quarter earnings per share of $2.12 has witnessed two upward revisions and three downward movements in the past 30 days. The estimate suggests a massive improvement from earnings of 1 cent reported in the prior-year quarter.

The Zacks Consensus Estimate for the to-be-reported quarter’s revenues of $842 million indicates a 49.3% improvement from the year-ago reported figure.

Factors to Consider

In the June-end quarter of 2022, oil and natural gas prices were significantly higher than the year-ago quarter. A healthier commodity price scenario is likely to have aided SM Energy’s operations in the second quarter.

With the rapid economic recovery witnessed in the domestic market, the Zacks Consensus Estimate for SM Energy’s second-quarter production is pegged at 145 thousand barrels of oil equivalent per day (MBoe/d), suggesting an improvement from 137 MBoe/d in the year-ago quarter.

Higher commodity prices were favorable for the company’s exploration and production activities, which are expected to have aided its bottom line in the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for SM Energy 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. That is not the case here, as you will see below.

Earnings ESP: SM Energy’s Earnings ESP is 0.00%. This is because the Most Accurate Estimate is currently pegged at $2.12 per share, the same as the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Stocks to Consider

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

Pioneer Natural Resources Company PXD has an Earnings ESP of +0.37% and is a Zacks #2 Ranked player at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pioneer is scheduled to release second-quarter results on Aug 2. The Zacks Consensus Estimate for PXD’s quarterly earnings is pegged at $8.81 per share, suggesting a significant increase from the prior-year figure.

Suncor Energy, Inc. SU has an Earnings ESP of +11.91% and is currently a Zacks #2 Ranked player.

Suncor is scheduled to release second-quarter results on Aug 4. The Zacks Consensus Estimate for SU’s quarterly earnings is pegged at $1.74 per share, suggesting a massive improvement from the prior-year figure.

Cactus Inc. WHD currently has an Earnings ESP of +3.74% and a Zacks Rank #2.

Cactus is scheduled to release second-quarter earnings on Aug 4. The Zacks Consensus Estimate for WHD’s earnings is pegged at 36 cents per share, suggesting a massive increase from the prior-year reported figure.

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


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