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Northern to Report Q3 Earnings: What's in Store for the Stock?

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Northern Oil and Gas, Inc. (NOG - Free Report) is set to release third-quarter results on Nov. 5, 2024. The Zacks Consensus Estimate for earnings is pegged at $1.16 per share and that for revenues is pinned at $536.47 million.

Let us delve into the factors that are likely to have influenced this oil and gas exploration and production company’s performance in the to-be-reported quarter. But first, it is worth taking a look at NOG’s performance in the last reported quarter.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
 

Highlights of NOG’s Q2 Earnings

In the last reported quarter, this Minnetonka, MN-based independent energy company’s earnings beat the consensus mark, thanks to year-over-year strong production. The company reported adjusted earnings per share of $1.46, which beat the Zacks Consensus Estimate of $1.20.  Additionally, revenues of $561 million surpassed the Zacks Consensus Estimate of $538 million.

NOG's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed the same twice, delivering an average surprise of 7.36%.

This is depicted in the graph below:

Northern Oil and Gas, Inc. Price and EPS Surprise

Northern Oil and Gas, Inc. Price and EPS Surprise

Northern Oil and Gas, Inc. price-eps-surprise | Northern Oil and Gas, Inc. Quote

 

NOG’s Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings has witnessed two upward movements and four downward movements in the past 30 days. The estimated figure indicates a 32.95% year-over-year decrease. The Zacks Consensus Estimate for revenues indicates a 4.85% increase from the year-ago level.
 

Factors to Consider for NOG’s Q3 Performance

NOG's revenues are likely to have improved in the quarter to be reported. The company generates revenues by acquiring oil and gas properties in high-potential areas and then extracting and selling oil and natural gas. Northern Oil and Gas often holds non-operating working interests in wells, which allows it to earn a share of the revenues without bearing the operational costs associated with drilling and maintaining those wells. This strategy is advantageous as it minimizes financial risk while still capitalizing on production. Income from these operations is heavily influenced by market conditions, particularly the fluctuating prices of oil and gas. When prices rise, the company's revenues can significantly increase, reflecting the direct relationship between market demand and earnings.

Our model predicts third-quarter revenues to have increased to $529.9 million from the year-ago quarter’s level of $511.7 million. This increase was largely due to strong performance in oil revenues. Based on our model estimates, the oil revenues are likely to have grown 4.5% from the year-ago quarter’s level of $464.8 million.

On a somewhat bearish note, the increase in NOG’s costs might have dented the company’s to-be-reported bottom line. The company’s third-quarter total operating expenses are likely to have totaled $359.4 million, which was up 32.3% from the year-ago quarter’s level. Moreover, its production expenses are expected to have increased from $82.5 million to $106.9 million in the same time frame. Its depletion, depreciation, amortization and accretion expenses are expected to have increased from $133.8 million to $191.0 million in the same period.
 

What Does Our Model Predict for NOG?

The proven Zacks model does not conclusively predict an earnings beat for Northern Oil and Gas 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. However, that is not the case here.

NOG’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is 0.00%.

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

Zacks Rank of NOG:  NOG currently carries a Zacks Rank #3.
 

Stocks to Consider

Here are some firms from the energy space that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.

Sunoco (SUN - Free Report) has an Earnings ESP of +13.44% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The firm is scheduled to release earnings on Nov. 6. SUN’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the remaining one, delivering an average surprise of 8.09%.

Helmerich & Payne (HP - Free Report) has an Earnings ESP of +2.90% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Nov. 13.

HP’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in the remaining one, delivering an average surprise of 14.79%. It is engaged in the contract drilling of oil and gas wells in the United States and internationally.

TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +3.07% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Nov. 7. Valued at around $48.05 billion, TRP has gained 26.8% in a year.

The company is primarily focused on natural gas transmission through its 57,500-mile network of pipelines located in Canada, the United States and Mexico. TC Energy is also involved in other businesses, including power generation, natural gas storage and crude oil pipelines.

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