Yahoo Finance Are Magellan's (MMP) Q1 Earnings Poised to Beat Expectations?
Magellan Midstream Partners, L.P. MMP is set to release first-quarter results on May 4. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.21 per unit on revenues of $803.6 million.
Let’s delve into the factors that might have influenced the energy infrastructure provider’s performance in the March quarter. But it’s worth taking a look at MMP’s previous-quarter performance first.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, this Tulsa, OK-based midstream operator missed the consensus mark primarily due to the low operating margin of the refined products segment that missed the Zacks Consensus Estimate. Magellan Midstream had reported adjusted net income per unit of $1.06, lagging the Zacks Consensus Estimate of $1.31. However, revenues of $861 million beat the Zacks Consensus Estimate by 0.6% on higher average transportation rates.
MMP beat the Zacks Consensus Estimate in three of the last four quarters and missed in the other, which resulted in an earnings surprise of 2.2%, on average. This is depicted in the graph below:
Magellan Midstream Partners, L.P. Price and EPS Surprise
Magellan Midstream Partners, L.P. price-eps-surprise | Magellan Midstream Partners, L.P. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 12% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 19.1% increase from the year-ago period.
Factors to Consider
Magellan Midstream is expected to have benefited from the increase in refined product tariff rates. The unit — the partnership’s largest — is also likely to have experienced higher long-haul shipments that command premium rates. Consequently, the consensus mark for Magellan Midstream’s Q1 refined products total revenues is pegged at $612 million, up from the prior-year quarter level of $552.9 million.
MMP is also expected to reap the rewards of higher revenues from its core, fee-based transportation and terminals’ assets. Considering growing customer demand for the pasrtnership’s impressive portfolio, the Zacks Consensus Estimate for the first-quarter transportation and terminals’ revenues is $451 million, indicating an increase of 6.6% year over year.
Why a Likely Positive Surprise?
Our proven model predicts an earnings beat for Magellan Midstream this season. 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.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Magellan Midstream has an Earnings ESP of +0.70% and a Zacks Rank #3.
Other Stocks to Consider
Magellan Midstream is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:
Occidental Petroleum OXY has an Earnings ESP of +0.09% and a Zacks Rank #3. The firm is scheduled to release earnings on May 9.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Occidental Petroleum’s expected EPS growth rate for three to five years is currently 22%, which compares favorably with the industry's growth rate of 21.8%. Valued at around $55.3 billion, OXY has gained 4.9% in a year.
EOG Resources EOG has an Earnings ESP of +0.74% and a Zacks Rank #3. The firm is scheduled to release earnings on May 4.
EOG Resources’ expected EPS growth rate for three to five years is currently 28.6%, which compares favorably with the industry's growth rate of 25.8%. Valued at around $70.2 billion, EOG has gained 2% in a year.
ConocoPhillips COP has an Earnings ESP of +0.13% and a Zacks Rank #3. The firm is scheduled to release earnings on May 4.
ConocoPhillips beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 2.4%, on average. Valued at around $124.7 billion, COP has gained 6.9% in a year.
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
Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report
Magellan Midstream Partners, L.P. (MMP) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
