Press Release: S&Pgr Withdraws Kca Deutag Alpha Ltd. 'B' Rating

Helmerich & Payne, Inc. HP is set to release first-quarter earnings on Feb. 5, after the closing bell. The Zacks Consensus Estimate for earnings is pegged at 69 cents per share on revenues of $691.43 million.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Let us delve into the factors that might have influenced HP’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 HP’s Q4 Earnings

In the last reported quarter, the Tulsa, OK-based oil and gas drilling company’s earnings missed the consensus mark. HP reported adjusted earnings of 76 cents per share, which missed the Zacks Consensus Estimate by 3 cents. This was due to the weakness in the company's International Solutions and Gulf of Mexico segments. Operating revenues of $693.8 million beat the Zacks Consensus Estimate by 1%.

HP’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark in one, delivering an average earnings surprise of 14.88%. This is depicted in the graph below:

Helmerich & Payne, Inc. Price and EPS Surprise

Helmerich & Payne, Inc. price-eps-surprise | Helmerich & Payne, Inc. Quote

Trend in Estimate Revision for HP Stock

The Zacks Consensus Estimate for first-quarter 2025 earnings has witnessed two upward revisions and a downward movement in the past 30 days. The estimated figure indicates a 2.11% year-over-year increase. However, the Zacks Consensus Estimate for revenues indicates a decrease of 28.87% from the year-ago period.

Factors to Consider Ahead of HP’s Q1 Release

Helmerich & Payne generally makes money by offering drilling services and technology to oil and gas companies. HP operates in several regions, including North America, the Gulf of Mexico and internationally. The company earns revenues by drilling for oil and gas in these areas and by developing technologies that improve drilling efficiency and well quality.

HP's revenues are likely to have been positively impacted in the quarter to be reported. Our model predicts first-quarter revenues to have increased to $688 million from the year-ago period’s level of $677.1 million. This increase is due to the higher performance across North America Solutions, Offshore Gulf of Mexico and Other segments.

According to our model, HP’s North America Solutions is expected to grow 2.5% year over year, reaching $609.4 million in the quarter to be reported. The Offshore Gulf of Mexico is expected to increase 11.3% year over year, totaling $28.4 million, while the Other segment is anticipated to grow 1.1% year over year, reaching $18 million during the same time.

On another positive note, the company’s research and development expenses are expected to have fallen 40.7%, totaling $5.1 million. This reduction in costs highlights the company's efforts to improve efficiency and control expenses.

What Does Our Model Say About HP?

Our proven model predicts an earnings beat for Helmerich & Payne 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.

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

HP has an Earnings ESP of +5.29% and a Zacks Rank #3 at present.

Other Stocks to Consider

Helmerich & Payne is not the only energy company that have the right elements to post an earnings beat in this reporting cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

California Resources CRC has an Earnings ESP of +2.59% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The firm is scheduled to release earnings on March 3. Notably, the Zacks Consensus Estimate for California’s 2025 earnings per share indicates 8.03% year-over-year growth. Valued at around $4.67 billion, CRC’s shares have risen 0.1% in a year.

Ovintiv OVV has an Earnings ESP of +3.09% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb. 26.

In the past 30 days, the Zacks Consensus Estimate for 2025 earnings has moved up 6.3%. Valued at around $11.34 billion, OVV’s shares have gained 2.1% in a year.

Energy Transfer ET has an Earnings ESP of +9.09% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb. 11.

Notably, the Zacks Consensus Estimate for Energy Transfer’s 2025 earnings per share indicates 6.08% year-over-year growth. Valued at around $67.83 billion, ET has gained 40% in a year.

Zacks Investment Research

Shell plc SHEL is set to release fourth-quarter results on Jan. 30. The current Zacks Consensus Estimate for the to-be-reported quarter is earnings of $1.78 per share on revenues of $80.1 billion.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Let’s delve into the factors that might have influenced the integrated energy behemoth’s results in the December quarter. But it’s worth taking a look at SHEL’s previous-quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, Europe’s largest oil company beat the consensus mark, backed by strong production and higher LNG sales. SHEL had reported earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) — of $1.92, well above the Zacks Consensus Estimate of $1.72. However, revenues of $72.5 billion came in 14.3% below the Zacks Consensus Estimate due to weaker commodity prices and a significant drop in the Chemicals and Products’ performance.

Shell beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 15.4%, on average. This is depicted in the graph below:

Shell PLC Unsponsored ADR Price and EPS Surprise

Shell PLC Unsponsored ADR price-eps-surprise | Shell PLC Unsponsored ADR Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the third-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 19.8% drop year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests essentially no change from the year-ago period.

Factors to Consider

Earlier this month, Shell released a preliminary report for the October-December period, which flagged significant hurdles across its integrated gas, renewables, and oil trading divisions, which are expected to impact overall performance.

Declining Gas Earnings and Production Guidance: Shell has warned of a sharp decline in earnings from its Integrated Gas division compared to the $2.87 billion reported in Q3 2024. This is primarily attributed to the expiry of hedging contracts that shielded the company from volatile market conditions during the Russia-Ukraine conflict. Additionally, natural gas production is projected to fall to 880,000-920,000 barrels of oil equivalent per day from 941,000 in the previous quarter, due to maintenance at Qatar’s Pearl GTL plant. Liquefied natural gas (LNG) volumes are also expected to decline to 6.8-7.2 million metric tons from 7.5 million, reflecting reduced feedgas deliveries and fewer cargoes.

Impairments and Cash Flow Challenges: Shell has announced plans to record a non-cash, post-tax impairment of $1.5 billion to $3 billion, with up to $1.2 billion stemming from its renewables division. This reflects the challenges faced by its offshore wind and energy solutions business, which struggled to achieve consistent profitability in 2024. Adding to the strain, the company anticipates a $1.3 billion hit to cash flow from operations due to emission-permit payments in Germany and the United States, a recurring Q4 expense.

Lower Trading and Seasonal Weakness: Shell’s trading operations in both the Integrated Gas and Oil Products divisions are expected to post significantly weaker results than in Q3. Seasonal declines in demand and the expiration of hedging contracts have weighed on performance, while chemicals margins have remained depressed. These factors contribute to what Shell itself describes as a "soft" quarter, a sentiment echoed by market analysts who anticipate earnings downgrades.

What Does Our Model Say?

The proven Zacks model does not conclusively show that Shell is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

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

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -18.69%.

Zacks Rank: SHEL currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

While an earnings beat looks uncertain for Shell, here are some firms from the energy space that you may want to consider on the basis of our model:

Energy Transfer ET has an Earnings ESP of +9.09% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb. 11.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the Zacks Consensus Estimate for Energy Transfer’s 2025 earnings per share indicates 6.1% year-over-year growth. Valued at around $71.6 billion, ET has gained 59.9% in a year.

Helmerich & Payne HP has an Earnings ESP of +4.57% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb. 5.

Helmerich & Payne beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 14.9%. Valued at around $3.5 billion, HP has gained 3.3% in a year.

MPLX LP MPLX has an Earnings ESP of +0.78% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb. 4.

Notably, the Zacks Consensus Estimate for Chevron’s 2025 earnings per share indicates 3.5% year-over-year growth. Valued at around $52.9 billion, MPLX has gained 49.5% in a year.

Zacks Investment Research