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W&T Offshore (WTI) Reports First Quarter Loss, Highest Revenue Estimate

W&T Offshore (WTI) came out with a quarterly loss of $0.05 per share compared to the Zacks Consensus Estimate of a loss of $0.04. For comparison, a year earlier the loss was $0.02 per share. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of -25%. A quarter ago, it was expected that this independent oil and gas company would post earnings of $0.02 per share when it actually produced a loss of $0.06, delivering a surprise of -400%.

The company has failed to beat consensus EPS estimates over the last four quarters.

W&T, which belongs to the Zacks Oil and Gas – Exploration and Production – United States industry, posted revenues of $140.79 million for the quarter ended March 2024, surpassing the Zacks Consensus Estimate by 1.31%. For comparison, revenues from the previous year amounted to $131.73 million. The company has topped consensus revenue estimates twice over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

W&T shares have lost about 27% since the beginning of the year compared with the S&P 500’s gain of 9.3%.

What’s next for W&T?

While W&T has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for W&T is unfavorable. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into the stock’s Zacks Rank #4 (Sell). Therefore, it can be expected that the company’s shares will underperform the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$0.05 on revenue of $142.69M for the coming quarter and -$0.12 on revenue of $596.08M for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, the Oil & Gas – Exploration & Production – United States industry is currently in the bottom 42% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Geopark (GPRK), another company in the same industry, is yet to release results for the quarter ended March 2024.

The oil and gas company is expected to post quarterly earnings of $0.59 per share in its upcoming report, representing a year-over-year change of -6.4%. The consensus EPS estimate for the quarter has been revised upwards by 5.5% over the last 30 days to the current level.

Geopark revenues are expected to be $192.63 million, an increase of 5.6% compared to the same quarter last year.

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