Coterra Energy Inc. CTRA is set to release first-quarter results on May 2. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 81 cents per share on revenues of $1.8 billion.

Let’s delve into the factors that might have influenced the oil and gas exploration and production firm’s performance in the March quarter. But it’s worth taking a look at CTRA’s previous-quarter performance first.

Highlights of Q4 Earnings & Surprise History

In the last-reported quarter, the Houston, TX-based upstream energy company missed the consensus mark due to higher operating costs. CTRA had reported adjusted earnings per share of 83 cents, 18 cents lower than the Zacks Consensus Estimate. However, revenues of $2.2 billion generated by the firm came in above the Zacks Consensus Estimate of $1.9 billion on the back of higher commodity prices.

CTRA missed the Zacks Consensus Estimate in three of the last four quarters, which resulted in a negative earnings surprise of 3.7%, on average. This is depicted in the graph below:

Coterra Energy Inc. Price and EPS Surprise

Coterra Energy Inc. price-eps-surprise | Coterra Energy Inc. Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the first-quarter bottom line has remained the same in the past seven days. The estimated figure indicates a 113.2% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 295.1% increase from the year-ago period.

Factors to Consider

CTRA is likely to have cashed in on the surge in hydrocarbon realizations. In the previous three-month period, Corterra’s average realized unit prices for oil, natural gas and natural gas liquids were $75.61, $4.43 and $34.18, respectively, well above the year-ago levels. The increase in price is most likely to have continued in the to-be-reported quarter, with oil/gas revisiting their multi-year highs following geopolitical tensions and the ongoing macroeconomic recovery. This price boost is likely to have buoyed the first-quarter revenues and cash flows of Corterra.

Corterra Energy is also expected to have benefited from higher production during the March period. In the fourth quarter of 2021, the company’s production averaged 686.2 thousand barrels of oil equivalent per day (MBOE/d), soaring from 395.8 MBOE/d a year ago. The uptick is most likely to have continued in the to-be-reported quarter, thanks to CTRA’s impressive production profile from its assets in the Permian Basin, Marcellus Shale and Anadarko Basin.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for CTRA this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Corterra has an Earnings ESP of +2.35% and a Zacks Rank #3.