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Is a Beat Likely for Enterprise Products (EPD) in Q4 Earnings?

Zacks Equity Research
·3-min read

Enterprise Products Partners LP EPD is set to report fourth-quarter 2022 results on Feb 1, before the opening bell.

In the last reported quarter, the midstream infrastructure provider’s third-quarter adjusted earnings per limited partner unit of 63 cents beat the Zacks Consensus Estimate of 61 cents, owing to higher contributions from the NGL Pipelines & Services business.

In the trailing four quarters, Enterprise Products beat the Zacks Consensus Estimate thrice and missed the same once, the average earnings surprise being 4.1%. This is depicted in the graph below:

Enterprise Products Partners L.P. Price and EPS Surprise

 

Enterprise Products Partners L.P. Price and EPS Surprise
Enterprise Products Partners L.P. Price and EPS Surprise

Enterprise Products Partners L.P. price-eps-surprise | Enterprise Products Partners L.P. Quote

Estimate Trend

The Zacks Consensus Estimate for fourth-quarter earnings of 60 cents per unit has seen two upward revisions and one downward movement in the past 30 days. The figure suggests a 15.4% year-over-year increase.

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The Zacks Consensus Estimate for revenues is pegged at $14.3 billion for the quarter, indicating an increase of 25.6% from the year-ago reported figure.

Earnings Whispers

Our proven model conclusively predicts an earnings beat for Enterprise Products this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here, as you will see below.

Earnings ESP: Earnings ESP for the partnership is +1.95%. This is because the Most Accurate Estimate is currently pegged at earnings of 61 cents per unit, whereas the Zacks Consensus Estimate is pinned at 60 cents per unit. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Enterprise Products currently carries a Zacks Rank #3.

Factors to Consider

In the December-end quarter of 2022, the price scenario of oil and natural gas was healthier year over year. A favorable environment for exploration and production activities is likely to have aided upstream activities, increasing production.

Higher production volumes are expected to have increased demand for transportation and storage assets, thereby favoring midstream players like Enterprise Products.

The Zacks Consensus Estimate for fourth-quarter gross operating margin from natural gas pipelines & services is pegged at $238 million, suggesting an increase from $195 million reported in fourth-quarter 2021. Our estimate for the metric is pegged at $225.3 million, also indicating a year-over-year improvement.

Other Energy Stocks With Favorable Combination

Here are some other firms worth considering, as these, too, have the right combination of elements to beat on earnings in the upcoming quarterly reports:

ConocoPhillips COP has an Earnings ESP of +0.57% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

ConocoPhillips is scheduled to report fourth-quarter results on Feb 02. The Zacks Consensus Estimate for COP’s earnings is pegged at $2.72 per share, suggesting a significant increase from the prior-year reported figure.

Imperial Oil Limited IMO has an Earnings ESP of +18.2% and a Zacks Rank of 3.

Imperial Oil is scheduled to report fourth-quarter results on Jan 31. The Zacks Consensus Estimate for IMO’s earnings is pegged at $1.56 per share, suggesting a significant increase from the prior-year quarter’s reported figure.

Marathon Petroleum Corporation MPC has an Earnings ESP of +0.31% and a Zacks Rank #3.

Marathon Petroleum is scheduled to release fourth-quarter earnings on Jan 31. The Zacks Consensus Estimate for MPC’s earnings is pegged at $5.54 per share, suggesting a significant increase from the prior-year quarter’s reported figure.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ConocoPhillips (COP) : Free Stock Analysis Report

Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report

Imperial Oil Limited (IMO) : Free Stock Analysis Report

Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research