Key Factors to Impact CNX Midstream's (CNXM) Q3 Earnings

CNX Midstream Partners LP CNXM is expected to release third-quarter 2019 results before the opening bell on Tuesday, Oct 29. The current Zacks Consensus Estimate for the to-be reported quarter is a profit of 52 cents on revenues of $74.2 million.

The Zacks Consensus Estimate for third-quarter earnings has been revised downward 1.9% in the past 30 days. Given this backdrop, let’s delve into the factors that might have influenced the company’s performance in the September quarter.

Factors to Consider This Quarter

Mixed signals from the Anchor Systems segment – representing around 98% of CNX Midstream’s revenue – cloud the third-quarter earnings outlook for the partnership.

Our model estimates third-quarter sales for the unit (which handles natural gas midstream facilities in the Marcellus Shale and Utica Shale in Pennsylvania and West Virginia) to be $73 million, down slightly from $76 million in the second quarter but 24.8% higher than the year-ago revenue of $58.5 million.  

Meanwhile, Anchor Systems throughput volumes improved 9% sequentially in the second quarter, a trend that most likely continued in the third quarter because of the explosive production growth of natural gas in the Marcellus and Utica shale regions.

What Does Our Model Say?

The proven Zacks model does not conclusively show that CNX Midstream is likely to beat estimates in the third 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: CNX Midstream has an Earnings ESP of 0.0%.

Zacks Rank: CNX Midstream sports a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Highlights of Q2 Earnings & Surprise History

In the last reported quarter, the natural gas midstream infrastructure operator beat the consensus mark on robust volume activity. CNX Midstream reported earnings of 63 cents per unit that surpassed the Zacks Consensus Estimate by 14 cents. The bottom line also increased 46.5% on a year-over-year basis. Revenues of $78.1 million were 28% higher than the year-ago quarter and beat the Zacks Consensus Estimate of $72 million.

As far as earnings surprises are concerned, the Canonsburg, PA-based partnership has a good record, having gone past the Zacks Consensus Estimate in three of the last four reports. This is depicted in the graph below:

CNX Midstream Partners LP Price and EPS Surprise


CNX Midstream Partners LP Price and EPS Surprise

CNX Midstream Partners LP price-eps-surprise | CNX Midstream Partners LP Quote

Stocks to Consider

While earnings beat looks uncertain for CNX Midstream, here are some firms from the energy space you may want to consider on the basis of our model, which shows that they have the right combination of elements to post earnings beat this season:

National Oilwell Varco, Inc. NOV has an Earnings ESP of +16% and is Zacks #3 Ranked. The company is anticipated to release earnings on Oct 29.

Gulfport Energy Corporation GPOR has an Earnings ESP of +3.57% and a Zacks Rank #3. The company is anticipated to release earnings on Oct 31.

The Williams Companies, Inc. WMB has an Earnings ESP of +1.63% and is Zacks #3 Ranked. The company is anticipated to release earnings on Oct 30.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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