Coterra Energy Inc. CTRA is gearing up to release its fourth-quarter results on Feb 22. Analysts are eyeing a profit of 56 cents per share on revenues of $1.5 billion for the quarter. As investors brace for the impending financial update, it’s crucial to assess the key factors that may have impacted the company’s performance during this period. However, to understand the trajectory, it’s essential to first revisit Coterra’s performance in the previous quarter.
Highlights of Q3 Earnings & Surprise History
During the last reported quarter, the Houston, TX-based upstream energy company surpassed the consensus mark on the back of robust production. CTRA reported adjusted earnings per share of 50 cents, outpacing the Zacks Consensus Estimate of 44 cents. Nonetheless, the company’s revenues of $1.4 billion fell 2% short of the Zacks Consensus Estimate, primarily due to weaker natural gas realizations.
Coterra Energy has a strong track record of beating earnings estimates, with an average earnings surprise of 11.8% over the last four quarters.
Coterra Energy Inc. Price and EPS Surprise
Coterra Energy Inc. price-eps-surprise | Coterra Energy Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 51.7% fall year over year. Meanwhile, the Zacks Consensus Estimate for revenues suggests a 32.4% decrease from the year-ago period.
Factors to Consider
Coterra Energy is expected to have capitalized on higher production during the quarter, driven by its assets in the Permian Basin, Marcellus Shale, and Anadarko Basin. In the previous quarter, the company’s production witnessed a 4.5% year-over-year increase. This upward trajectory is anticipated to have continued in the to-be-reported quarter, supported by enhanced well performance and improved cycle times. As a result, the Zacks Consensus Estimate for the company’s fourth-quarter volume stands at approximately 672 thousand barrels of oil equivalent per day (MBOE/d), representing a significant surge from the year-ago quarter’s level of 632.2 MBOE/d.
On a somewhat cautious note, a decline in commodity realizations might have offset the positive impacts of production gains. In the third quarter of 2023, the company’s average realized oil price decreased by 6.5% from the prior year, while natural gas fetched 64% less. This downward trend is expected to persist in the fourth quarter, with the consensus mark for natural gas and oil pegged 49.6% and 2.4% lower year over year.
What Does Our Model Say?
According to our proven Zacks model, the chances of Coterra Energy beating estimates in the fourth quarter appear uncertain. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) usually increases the likelihood of beating estimates; however, this is not indicative in Coterra’s case.
You can identify the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Coterra Energy is -2.20%.
Zacks Rank: CTRA currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Coterra Energy, here are some firms that you may want to consider based on our model:
Inter Parfums, Inc. IPAR has an Earnings ESP of +5.71% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 27.
Best Buy Co., Inc. BBY has an Earnings ESP of +0.64% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 29.
Alignment Healthcare, Inc. ALHC has an Earnings ESP of +4.55% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 27.
The 2024 Zacks Consensus Estimate for these companies indicates promising year-over-year earnings growth. These stocks have also shown significant earnings surprises and have weathered the challenges of the past year.
Stay ahead of upcoming earnings announcements with the Zacks Earnings Calendar.
