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Is a Beat Likely for Antero Resources (AR) in Q4 Earnings?

Zacks Equity Research

Antero Resources Corporation AR is set to report fourth-quarter 2019 results on Feb 12, after the closing bell.

In the last reported quarter, the exploration and production company came up with adjusted loss per share of 49 cents, wider than the Zacks Consensus Estimate of a loss of 26 cents. The bottom-line performance was affected by higher operating expenses and a decline in realized commodity prices.

The company beat the Zacks Consensus Estimate once in the last four quarters, as shown in the chart below.

Antero Resources Corporation Price and EPS Surprise

Antero Resources Corporation Price and EPS Surprise

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

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

Trend in Estimate Revision

The Zacks Consensus Estimate for fourth-quarter loss of 13 cents has seen three upward revisions and one downward movement in the past 30 days. The figure suggests a year-over-year decline of 128.3%.

Further, the Zacks Consensus Estimate for revenues is pegged at $1 billion for the quarter, indicating a decline of 17.9% from the year-ago reported figure.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Antero Resources this time around. This is because it has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Antero Resources has an Earnings ESP of +6.49%. This is because the Most Accurate Estimate is pegged at a loss of 12 cents, narrower than the Zacks Consensus Estimate of a loss of 13 cents per share.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #2.

Factors Driving the Better-Than-Expected Earnings

Antero Resources is among the fast-growing natural gas producers in the United States. Its strategic acreage position in low-risk/long reserve-life properties of the Appalachian Basin is likely to have a positive impact on fourth-quarter results.

The Zacks Consensus Estimate for average net production for the quarter is pegged at 3,335 million cubic feet of natural gas equivalent per day (MMcfe/d), indicating an increase from 3,213 MMcfe/d in the year-ago period. The same for natural gas production is pegged at 2,284 MMcf/d, suggesting growth from the year-ago level of 2,240 MMcf/d. The potential production growth is expected to positively impact the upcoming results. However, the positives are likely to have been partially offset by lower natural gas prices. The Zacks Consensus Estimate for natural gas price is pegged at $2.56 per Mcf, implying a decline from the year-ago level of $3.83.

Other Stocks to Consider

Some other energy stocks with the perfect mix of elements to beat on earnings in the upcoming quarterly releases are:

Cenovus Energy Inc. CVE has an Earnings ESP of +9.65% and a Zacks Rank #2. The company is set to release quarterly earnings on Feb 12. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enbridge Inc. ENB has an Earnings ESP of +1.10% and a Zacks Rank #2. The company is set to release quarterly earnings on Feb 14.

Continental Resources, Inc. CLR has an Earnings ESP of +2.79% and a Zacks Rank #3. The company is set to release quarterly earnings on Feb 26.

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