USA Compression Partners USAC is set to release third-quarter results on Nov. 5, 2024. The Zacks Consensus Estimate for earnings is pegged at 20 cents per share and that for revenues is pinned at $238.37 million.

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

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Highlights of USAC’s Q2 Earnings

In the last reported quarter, this Austin, TX-based energy natural gas compression services provider company’s earnings beat the Zacks consensus mark thanks to year-over-year improved pricing and utilization. Additionally, revenues of $235.3 million surpassed the Zacks Consensus Estimate of $233 million.

USAC beat the Zacks Consensus Estimate for earnings twice in the trailing four quarters while missing twice. The earnings surprise was 5.50%, on average.

This is depicted in the graph below:

USAC’s Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter 2024 earnings has not witnessed any movement in the past 30 days. The estimated figure indicates a 122.22% year-over-year increase. The Zacks Consensus Estimate for revenues indicates a 9.8% increase from the year-ago period.
 

Factors to Consider for USAC’s Q3 Performance

USAC's revenues are likely to have improved in the quarter to be reported. The company generates income by offering natural gas compression services to oil and gas producers. USAC owns and operates a fleet of compression equipment that it leases to these producers. In return, the producers pay USAC a fee for using the equipment, along with costs for maintenance and operation.

Our model predicts third-quarter revenues to increase to $236.1 million from the year-ago quarter’s level of $217.1 million. This can be attributed to the robust performance of the contract operations. Based on our model estimates, the contract operations segment is likely to have grown 9.4%, the related party segment by 5.1% from the year-ago quarter’s level.

On a somewhat bearish note, the increase in USAC’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 $161.9 million, up 3.7% from the year-ago quarter’s level.  Moreover, its cost of operations is expected to have increased from $74.9 million to $77.4 million in the same time frame. Its depreciation and amortization expenses are expected to have slightly increased marginally from $64.1 million to $64.5 million in the same period. The upward cost trajectory is expected to have continued in the third quarter due to the prevailing inflationary environment.
 

What Does Our Model Predict for USAC?

The proven Zacks model does not conclusively predict an earnings beat for USA Compression 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.

USAC’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 USAC:  USAC 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 season.

Sunoco SUN 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 has an Earnings ESP of +1.89% 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 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.

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USA Compression Partners, LP (USAC) : Free Stock Analysis Report

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