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Why Range Resources (RRC) is Likely to Deliver Q3 Earnings Beat

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Range Resources Corporation RRC is set to beat earnings estimates when it reports third-quarter 2021 results on Oct 26, after the closing bell.

In the last reported quarter, the upstream company announced adjusted earnings of 24 cents per share, in line with the Zacks Consensus Estimate. The bottom line was supported by a massive increase in commodity prices, and decreased exploration costs as well as direct operating expenses. This was partially offset by lower production volumes.

In the trailing four quarters, Range Resources’ earnings beat the Zacks Consensus Estimate once, missed twice and met the same on another occasion. This is depicted in the graph below:

Range Resources Corporation Price and EPS Surprise

Range Resources Corporation Price and EPS Surprise
Range Resources Corporation Price and EPS Surprise

Range Resources Corporation price-eps-surprise | Range Resources Corporation Quote

Let’s see how things have shaped up prior to this announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings per share of 51 cents has witnessed five upward and two downward revisions over the past 60 days. The estimated figure suggests a massive improvement from the year-ago loss of 5 cents.

Similarly, the consensus estimate for third-quarter revenues of $729.6 million indicates a 143.7% increase from the year-ago reported figure.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Range Resources 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: Earnings ESP for the company is currently +1.76%. This is because the Most Accurate Estimate is pegged at 52 cents per share, higher than the Zacks Consensus Estimate of 51 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Range Resources currently sports a Zacks Rank #1.

Factors Driving the Better-Than-Expected Earnings

As Range Resources is among the top 10 natural gas producers in the United States, a favorable price of the commodity is primarily expected to have positively impacted the bottom line in the third quarter. The Zacks Consensus Estimate for third-quarter natural gas price (excluding derivatives) is pegged at $3.52 per thousand cubic feet (Mcf), signaling a rise from the year-ago level of $1.48.

The consensus estimate for the company’s third-quarter natural gas production is pegged at 1,529 Mcf/d, indicating a decline from the year-ago level of 1,553 Mcf/d. The effects of significant improvement in natural gas prices are expected to have offset the negative impact of lower gas production.

The Zacks Consensus Estimate for its oil production is pegged at 8.49 thousand barrels per day (MBbls/d), indicating an increase from the year-ago period’s 7.13 MBbls/d. Also, the consensus estimate for third-quarter realized crude and condensate prices (excluding derivatives) is pegged at $62 per barrel, signaling a massive rise from $31.47 a year ago. Higher oil prices and production are expected to have provided a northbound thrust to the company’s bottom line.

Other Stocks to Consider

Here are some other companies from the Energy space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

EQT Corporation EQT has an Earnings ESP of +32.54% and a Zacks Rank of 2. It is scheduled to report third-quarter results on Oct 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

Callon Petroleum Company CPE has an Earnings ESP of +3.37% and is a Zacks #2 Ranked player. The company is scheduled to release third-quarter results on Nov 3.

Continental Resources, Inc. CLR has an Earnings ESP of +3.36% and a Zacks Rank #1. The firm is scheduled to release quarterly earnings on Nov 1.


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Range Resources Corporation (RRC) : Free Stock Analysis Report

EQT Corporation (EQT) : Free Stock Analysis Report

Continental Resources, Inc. (CLR) : Free Stock Analysis Report

Callon Petroleum Company (CPE) : Free Stock Analysis Report

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