Profit season is here again, with almost 10% of S&P 500 companies that published results in the third quarter of 2021. According to FactSet data, 80% reported actual EPS higher than estimates, with profits 14.7% higher than Wall Street estimates. No energy company has yet submitted its third quarter 2021 scorecard, but five are expected to do so this week. The energy sector is expected to post another boom quarter largely due to higher oil and gas prices.
The sector reported a profit of $ 13.9 billion in the second quarter of 2021, compared to a loss of – $ 10.6 billion in the second quarter of 2020, thanks to vast improvements in commodity prices, especially crude, which averaged $ 66.17 / bbl in Q2 2021, compared to $ 28 / bbl in Q2 2020 and $ 61. / bbl in the first quarter of 2021. US oil and gas supermajors ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) were the main contributors to improving industry profits, with the two companies accounting for $ 13.3 billion of the industry’s $ 24.6 billion year-over-year profit increase.
The five sub-industries of the energy sector, namely integrated oil and gas, oil and gas Oil and gas exploration and production, refining and marketing, oil and gas equipment and services, and oil and gas storage and transportation reported a year-over-year increase in profits over the year. other.
Manufacturer of hydrogen fuel cells Connect the power (NASDAQ: PLUG) is expected to release its third quarter results on November 8, but has already provided revenue guidance for next year.
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PlugPower issued Sales forecasts for fiscal year 2022 from $ 825 million to $ 850 million, good for an increase of about 65% from 2021 and above analysts’ consensus estimate of $ 759 million, and forecast sales of $ 3 billion by 2025. The company says it expects to generate $ 1 billion in revenue from material handling and $ 700 million from hydrogen fuel and says it can generate gross margins of 30 % on sales of hydrogen fuel at $ 6 / kilogram.
Here are five energy gains to watch out for this week.
# 1.NextEra energy
NextEra Energy (NYSE: NEE) is planned for publish the results for the third quarter of 2021 October 20 before the market opens.
The Florida-based utility has a consensus EPS forecast of $ 0.72, good for a 7.5% year-over-year improvement, while consensus revenue of $ 5.73 billion marks an increase of 19.7% year-on-year. NEE has beaten earnings expectations for six consecutive quarters.
According to Zacks analysts, the company’s next report will likely reflect the benefits of improving Florida economic conditions after the vaccine rolls out. The company’s constant investment in technology, improved reliability, and lower than the national average utility bills have helped NextEra gain more customers.
In addition, the company completed its SolarTogether program in the second quarter, which is expected to have a positive impact on third quarter performance.
# 2. NextEra energy partners
NextEra Energy Partners, LP. (NYSE: NEP) is one of the subsidiaries of NextEra Energy.
NextEra Energy Partners has stakes in dozens of wind and solar projects in the United States, as well as natural gas infrastructure assets in Texas. These contract projects use cutting edge technology to generate energy from wind and sun.
NEP is planned to report earnings October 20, before the market opens. The consensus EPS forecast for the quarter is $ 0.64, down from the $ 0.76 reported for the corresponding quarter last year.
KeyBanc analyst Sophie Karp assigned an overweight rating with a target of $ 89 for NEP stocks (13.5% up), saying the company’s portfolio of high-quality renewable assets and Strongly contracted cash flow with an asset pipeline through sponsor NextEra Energy is positioning NEP for several years of double-digit distribution growth.
# 3. Schlumberger
Oil services giant Schlumberger SA. (NYSE: SLB) is expected to release its results on October 22, before the market opens. Wall Street has a consensus EPS forecast of $ 0.36 for the company, a 125% increase from $ 0.16 last year.
SLB shares crashed after the company revealed it was won an “important contract” by Turkish Petroleum for engineering, procurement, construction and installation works of the Sakarya gas field, the largest gas reserve ever discovered in Turkey.
Schlumberger said it would provide the scope of well completion and the design, construction and commissioning of the initial production facility capable of handling up to 350 million cubic feet per day of gas.
# 4. Haliburton
Another oil services company, Cie Halliburton. (NYSE: HAL), is expected to release its results on Oct. 19 before the market opens. The company has a consensus EPS forecast of $ 0.28, up from $ 0.11 posted in the corresponding period last year.
UBS is the latest analyst to speak on HAL, giving the company a sell rating
but raised its estimates based on a positive contribution from the Completion & Production and Drilling & Evaluation divisions, higher North American activity and “improvement” internationally. The bank’s $ 13 price target implies a 17% drop from current levels.
# 5.Duc Energy
Charlotte-based electricity and gas utility Duke Energy (NYSE: DUK) is expected to release its results on November 11, before the market opens. Wall Street has a consensus forecast for quarterly EPS of $ 1.81 from $ 1.87 last year, while third quarter revenue is expected to reach $ 7.01 billion from $ 6.72 billion last year.
The company recently unveiled plans to build the 207 MW Ledyard Wind Project in Iowa, the company’s first renewable energy project in the state. Duke has entered into a 15-year virtual power purchase agreement with Verizon for 180 MW of wind power generated by the project to support the company’s sustainability goals. The project will provide enough renewable energy to power the equivalent of more than 72,000 homes and increase the US wind capacity of Duke Energy Sustainable Solutions to more than 3.1 GW.
In total, 10 equity research analysts gave the stock a conservation rating, while three assigned a buy rating. Duke Energy currently has a consensus rating of “Hold” and a consensus price target of $ 104.67, good for a 6% rise from the current price.
By Alex Kimani for Oil Octobers
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