Valaris Limited Reports Mixed Earnings: What’s Next for Investors?
Earnings Miss Expectations, But Revenue Surges
Valaris Limited (VAL) reported quarterly earnings of $0.88 per share, falling short of the Zacks Consensus Estimate of $1.36 per share. This is a substantial increase compared to earnings of $0.17 per share during the same time last year. These numbers have been adjusted for one-time items.
The company’s earnings surprise was -35.29%. In the previous quarter, Valaris had anticipated earnings of $0.96 per share, yet actual earnings soared to $2.03, marking an extraordinary surprise of 111.46%.
Over the past year, Valaris has beaten consensus EPS estimates in two out of four quarters. The company, part of the Zacks Oil and Gas – Drilling sector, generated revenues of $643.1 million for the quarter ending September 2024, exceeding the Zacks Consensus Estimate by 9.37%. This represents a significant increase from the $455.1 million in revenues from a year earlier. Notably, Valaris has surpassed consensus revenue estimates three times in the last four quarters.
How the stock reacts in the near term following these results will hinge on insights from the management during the earnings call.
So far this year, Valaris shares have decreased by about 29.3%, compared to a gain of 22.3% in the S&P 500 Index.
Future Outlook: What Should Investors Consider?
Given Valaris’s underperformance in the market, investors are left to ponder the next steps for the stock. The company’s earnings outlook can provide some insight into this dilemma. It reflects not only the current consensus earnings expectations for upcoming quarters but also recent changes in these expectations.
Research indicates a strong link between short-term stock movements and earnings estimate revisions. Investors can monitor these revisions independently or use rating tools like the Zacks Rank, which has effectively capitalized on earnings estimate revisions over time.
Before this earnings report, the revision trend for Valaris appeared favorable. While revisions may shift after these announcements, the current outlook corresponds to a Zacks Rank #2 (Buy) for the stock. This suggests the shares could outperform market averages soon. Investors can view the complete list of Zacks #1 Rank (Strong Buy) stocks for further options.
It will be intriguing to follow how earnings estimates evolve over the next few weeks. The consensus EPS estimate for the upcoming quarter stands at $1.71 on revenues of $625 million, while the projection for the current fiscal year is $4.37 on $2.3 billion in revenues.
It’s crucial to note that the industry outlook can significantly influence the stock’s performance. The Zacks Industry Rank indicates that Oil and Gas – Drilling currently places in the bottom 18% of over 250 Zacks industries. Historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1.
Upcoming Earnings Report: Helmerich & Payne
Another company in the same sector, Helmerich & Payne (HP), is set to report its results for the quarter ending September 2024 on November 13. Analysts expect earnings of $0.79 per share, reflecting a year-over-year increase of 14.5%. The EPS consensus estimate has been raised by 2.6% in the past month. Additionally, Helmerich & Payne’s revenues are anticipated to reach $687.23 million, marking a 4.2% rise from last year’s figures.
Should You Invest in Valaris Limited (VAL)?
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Valaris Limited (VAL): Free Stock Analysis Report
Helmerich & Payne, Inc. (HP): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
