Image: Bigstock

ConocoPhillips COP is scheduled to report second-quarter 2021 results on Aug 3, before the opening bell.

In the last reported quarter, the upstream energy company’s adjusted earnings per share of 69 cents comfortably beat the Zacks Consensus Estimate of 57 cents, primarily due to increased production and realized commodity prices. Production from the Lower 48, Canada and other regions marked an increase.

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

Trend in Estimate Revision

The Zacks Consensus Estimate for second-quarter earnings per share of $1.15 has witnessed seven upward revisions and no downward movement by firms in the past 30 days. This estimate is indicative of a 225% increase from the year-ago reported figure. Similarly, the Zacks Consensus Estimate for second-quarter revenues is pegged at $10.2 billion, suggesting a jump of 153.9% from the year-ago reported figure.

The upstream firm beat earnings estimates twice in the trailing four quarters, while missed the same on the other two occasions, delivering an average negative surprise of 9.7%.

ConocoPhillips Price and EPS Surprise

Factors Driving Second-Quarter Earnings

Being primarily involved in the exploration and production of oil and natural gas, ConocoPhillips’ earnings and revenues are directly related to commodity prices. The Zacks Consensus Estimate for average realized crude oil price for the second quarter is pegged at $63 per barrel, indicating a significant increase from $25.10 a year ago. Also, the consensus estimate for adjusted average natural gas price is pegged at $4.16 per thousand cubic feet, suggesting an increase from $3.22 in the prior-year period.

The Zacks Consensus Estimate for overall production is pegged at 1544 thousand barrels of oil equivalent per day (MBoe/d), indicating an increase from 1,289 MBoe/d in the year-ago quarter. The consensus estimate for crude oil production is 828 thousand barrels per day (MBbls/d), signaling a rise from 474 MBbls/d a year ago.

Therefore, increased production, and improved oil and gas prices are likely to have led to a year-over-year rise in profit levels. Yet, with potential increase in output, production and operating expenses are expected to have increased in the quarter under review, making earnings beat prediction difficult.

What the Quantitative Model Suggests

Our proven model does not conclusively predict an earnings beat for ConocoPhillips this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here as you will see below.

Earnings ESP: ConocoPhillips has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate for the quarter are currently pegged at $1.15 per share. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: ConocoPhillips currently sports a Zacks Rank #1.

Stocks That Warrant a Look

While an earnings beat looks uncertain for ConocoPhillips, here are some companies from the Energy space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

EOG Resources, Inc. EOG has an Earnings ESP of +0.50% and a Zacks Rank of 1. It is scheduled to report second-quarter results on Aug 4.

Cimarex Energy Co. XEC has an Earnings ESP of +5.79% and is a Zacks #3 Ranked player. The company is scheduled to release second-quarter results on Aug 5.

Continental Resources, Inc. CLR has an Earnings ESP of +2.77% and a Zacks Rank #1. The firm is scheduled to release quarterly earnings on Aug 2.