Magnolia Oil & Gas Corporation MGY is set to report fourth-quarter earningson Feb. 18. The Zacks Consensus Estimate for earnings is pegged at 46 cents per share and the same for revenues is pinned at $330.02 million.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Let us delve into the factors that might have influenced MGY’s performance in the to-be-reported quarter. Before that, it is worth taking a look at the company’s performance in the last reported quarter.
Highlights of MGY’s Q3 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based oil and gas exploration and production company reported a net profit of 52 cents per share, which beat the Zacks Consensus Estimate by 4 cents. This was primarily due to a healthy increase in production volumes. The company’s total revenues were $333.1 million, which outpaced the Zacks Consensus Estimate by $2.1 million. MGY’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the remaining one, delivering an average surprise of 5.52%. This is depicted in the graph below:
Magnolia Oil & Gas Corp Price and EPS Surprise
Magnolia Oil & Gas Corp price-eps-surprise | Magnolia Oil & Gas Corp Quote
Trend in MGY’s Estimate Revision
The Zacks Consensus Estimate for fourth-quarter 2024 earnings has not witnessed any movement in the past seven days. The estimated figure indicates an 8% year-over-year bottom-line decrease. However, the Zacks Consensus Estimate for revenues indicates an increase of 2.29% from the year-ago period’s level.
Factors to Consider Ahead of MGY’s Q4 Release
MGY generates revenues by acquiring land or leases with oil and natural gas reserves, primarily in South Texas. The company explores these properties, drills wells to extracts the oil and gas, and sells the resources to other energy companies. By focusing on areas such as the Eagle Ford Shale and Austin Chalk, MGY profits from the difference between the costs of drilling and production and the income from selling the extracted oil and gas.
MGY’s revenues are likely to have improved in the quarter to be reported. Our model predicts fourth-quarter revenues to have increased to $327.9 million from the year-ago quarter’s level of $322.6 million. This can be attributed to the strong revenue contribution from oil and natural gas. The oil segment’s revenues are expected to have increased 1.3% year over year, totaling $255.9 million. The natural gas segment’s revenues are predicted to have increased 17.1% at the same time, amounting to $30.9 million.
Regarding production volumes, we expect the company’s total production to have reached 8.6 million barrels of oil equivalent (MMboe) in the fourth quarter, an 8.3% increase from the year-ago quarter’s level of 7.9 MMboe. Oil production is expected to have risen 8.5% year over year, totaling 3.5 thousand barrels of oil (MBbls). Similarly, natural gas liquids are forecasted to have increased 4.6% year over year, totaling 2.3 MBbls. Gas production is predicted to have grown 13.6% year over year, reaching 16.2 million cubic feet.
On the cost side, MGY’s efforts to reduce expenses are likely to have positively impacted its upcoming bottom line. We expect the company’s gathering, transportation and processing expenses to have reached $8.7 million in the fourth quarter, which is 20.7% down from the year-ago quarter’s level of $10.9 million.
MGY is expected to report higher revenues and improved profitability in the fourth quarter, driven by increased production and effective cost management.
What Does Our Model Predict for MGY?
Our proven model predict an earnings beat for Magnolia 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. This is exactly the case here.
Earnings ESP of MGY: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is +1.73%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
MGY’s Zacks Rank: MGY currently carries a Zacks Rank #3.
Other Stocks to Consider
Here are some other firms from the energy space that you may want to consider, as these, too, have the right combination of elements to post an earnings beat this reporting cycle.
CNX Resources CNX has an Earnings ESP of +3.60% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Valued at around $4.44 billion, CLMT’s shares have gained 56.8% in a year. Notably, the Zacks Consensus Estimate for CNX’s 2025 earnings per share indicates 26.64% year-over-year growth.
Calumet, Inc. CLMT has an Earnings ESP of +7.11% and a Zacks Rank #2. Valued at around $1.5 billion, CLMT’s shares have lost 0.1% in a year.
Notably, the Zacks Consensus Estimate for CLMT’s 2025 earnings per share indicates 104.46% year-over-year growth.
California Resources CRC has an Earnings ESP of +2.59% and a Zacks Rank #3. The firm is scheduled to release earnings on March 3.
CRC’s earnings beat the consensus estimate in each of the trailing four quarters, delivering an average surprise of 13.11%. Valued at around $4.18 billion, CRC’s shares have lost 11.7% in a year.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>CNX Resources Corporation. (CNX) : Free Stock Analysis Report
Calumet, Inc. (CLMT) : Free Stock Analysis Report
California Resources Corporation (CRC) : Free Stock Analysis Report
Magnolia Oil & Gas Corp (MGY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
