What's in Store for Helmerich & Payne in Q3 Earnings?

Helmerich & Payne, Inc. HP is set to release fiscal third-quarter earnings on Jul 24, after the closing bell. The current Zacks Consensus Estimate for earnings is pegged at 77 cents per share on revenues of $668.8 million.

Let's delve into the factors that might have influenced HP's performance in the to-be-reported quarter. Before that, it's worth taking a look at the company's performance in the last reported quarter.

Highlights of Q2 Earnings

In the last reported quarter, the Tulsa, OK-based oil and gas drilling company's earnings marginally beat the consensus mark. HP reported adjusted earnings of 86 cents per share, which was one cent higher than the Zacks Consensus Estimate. This was attributed to the strong performance of the International Solutions unit, which reported an operating profit of $3.6 million, surpassing the consensus estimate of a loss of $1.6 million.

Operating revenues of $687.9 million also beat the Zacks Consensus Estimate by 1.2%. 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 15.53%.

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter fiscal 2024 earnings has witnessed an upward revision and no downward movement in the past 30 days. The estimated figure indicates a 29.36% year-over-year decline. The Zacks Consensus Estimate for revenues indicates a decrease of 7.61% from the year-ago period.

Factors to Consider

On a positive note, Helmerich & Payne‘s operating costs and expenses are projected to have reached $559.5 million in the fiscal third quarter, down 2.7% from the year-ago period's level. Specifically, the company's drilling services and other operating expenses are expected to have reduced from $430.2 million to $386.9 million. This reduction in costs highlights the company's efforts to improve efficiency and control expenses.

On the other hand, HP's revenues are likely to have been negatively impacted in the quarter to be reported. Our model predicts fiscal third-quarter revenues to decrease to $666.1 million from the year-ago period's level of $724 million. This decline is due to the weaker performance across North America Solutions, International Solutions, Offshore Gulf of Mexico and Other segments, reflecting challenges in market conditions and segment-specific issues.

What Does Our Model Predict?

The proven Zacks model does not conclusively predict an earnings beat for Helmerich & Payne 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's not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is +0.97%.

Zacks Rank:  HP currently carries a Zacks Rank #5 (Strong Sell).

Stocks to Consider

Here are some firms that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.

Coterra Energy CTRA has an Earnings ESP of +3.01% and a Zacks Rank #2 at present.

The firm is scheduled to release earnings on Aug 1. CTRA has a trailing four-quarter average earnings surprise of 9.81%. Valued at around $20.1 billion, CTRA's shares have risen 2.2% in a year.

Pembina Pipeline PBA currently has an Earnings ESP of +9.09% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 8.

PBA has a trailing four-quarter average earnings surprise of 10.91%. Valued at around $21.84 billion, PBA's shares have risen 21.9% in a year.

Baker Hughes BKR has an Earnings ESP of +1.59% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Jul 25.

BKR has a trailing four-quarter average earnings surprise of 11.4%.  Valued at around $36.09 billion, BKR's shares have risen 2% in a year.

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