|
|
|
|
|||||
|
|
|
New: Introducing “Why Is It Moving?” - lightning-fast, AI-driven explanations of stock moves
The third quarter of 2025 brought contrasting trends for the Oils-Energy sector — crude prices declined amid oversupply and global economic concerns, while natural gas prices surged due to tighter supply and geopolitical tensions. This divergence is shaping a complex earnings season for the Oils-Energy sector. As energy companies prepare to report their third-quarter earnings, investors will be closely monitoring how they are responding to market volatility — whether through cost discipline, portfolio adjustments, or increased focus on natural gas opportunities.
In the third quarter of 2025, crude oil prices saw a notable decline, with West Texas Intermediate falling to an average of $65.74 per barrel, representing a 14% drop compared to $76.24 during the same period in 2024. This price decline was primarily due to an oversupplied market as OPEC+ producers unwound their earlier output cuts, collectively adding more than 1.3 million barrels per day to global supply. Additionally, escalating U.S.-China trade tensions, renewed tariff threats on Indian imports, and weaker industrial demand expectations weighed on sentiment. President Trump’s policy focus on keeping energy costs subdued to control inflation further pressured prices, while slowing global consumption forecasts by the International Energy Agency added to the bearish outlook.
Conversely, natural gas prices saw a significant uptick. The Henry Hub spot price averaged $3.03 per million British thermal units (MMBtu) in the third quarter, representing a 44% increase from $2.11 per MMBtu in third-quarter 2024. This upward movement was driven by a convergence of supply disruptions and demand strength. Global LNG trade remained tight as Middle East supply interruptions following the Israel–Iran conflict constrained exports. U.S. gas inventories stayed below their five-year averages, while continued high LNG export volumes to Europe and Asia kept domestic supply balanced at lower levels. Additionally, fears of geopolitical blockages in major shipping routes and the effect of tariffs on LNG equipment imports contributed to higher production costs, amplifying the firmness in gas prices through the quarter.
The Oil/Energy sector remains a laggard in the third-quarter earnings season, with profitability challenges persisting amid a mixed pricing and demand environment. According to the latest Zacks Earnings Trends report, the sector is expected to post a 6.7% year-over-year decline in third-quarter earnings, a slight improvement from the 16.9% contraction in the second quarter but still well below the broader market's performance. With only 4% of S&P 500 energy companies having reported so far, early results show a divided beat rate — 100% on EPS but 0% on revenues — highlighting ongoing top-line pressures.
When viewed against the broader S&P 500, which is projected to deliver 6.5% earnings growth on 6.4% higher revenues, the energy sector’s struggles are particularly evident. Excluding energy, the index’s earnings growth would improve to 7.2%, highlighting the sector’s continued drag on overall market performance. Revenues are also expected to decline 1.4% for energy compared to the 6.4% growth for the S&P 500.
The sector’s challenges are multifaceted, including volatile commodity prices, shifting global demand, and persistent margin pressures. Net margins for the energy sector are expected to remain under pressure, contributing to the earnings decline even as other sectors show resilience. In contrast, several sectors are posting strong growth, including Aerospace (213.4%), Finance (21.3%), and Technology (11.4%).
This divergence in sector performance highlights the importance of selective investing in the current market environment. As third-quarter earnings reports continue to roll in, investors will be watching for signs of operational efficiency, cost discipline, and strategic positioning — particularly among companies with diversified energy exposure or stronger natural gas portfolios.
Given this backdrop, let's assess how the following oil and energy companies are positioned ahead of their Oct. 23 third-quarter earnings releases, and how equipped they are to navigate current challenges.
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
TechnipFMC plc FTI is scheduled to report quarterly earnings before the opening bell. The chances of a Houston, TX-based oil and gas equipment and services company delivering an earnings beat this time around are low, as it has an Earnings ESP of -3.68% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
TechnipFMC is an oil and gas company that provides equipment and services for offshore oil drilling and production, helping energy companies extract oil and gas more efficiently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for FTI’s earnings is pegged at 65 cents per share, suggesting a 1.56% increase from the prior-year reported figure. Regarding earnings surprises, FTI’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 32.34%.
This is depicted in the chart below:
TechnipFMC plc price-eps-surprise | TechnipFMC plc Quote
Valero Energy Corporation VLO is scheduled to report quarterly earnings before the opening bell. Valero Energy is a major oil refining and fuel marketing company that produces gasoline, diesel, and other fuels sold to consumers and businesses.
The chances of a San Antonio, TX-based oil and gas refining and marketing company delivering an earnings beat this time around are low, as it has an Earnings ESP of -4.85% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for the company’s earnings is pegged at $2.94 per share, suggesting a 157.89% increase from the prior-year reported figure. Regarding earnings surprises, VLO’s earnings beat the Zacks Consensus Estimate thrice in the last four quarters and missed once, delivering an average surprise of 129.86%.
This is depicted in the chart below:
Valero Energy Corporation price-eps-surprise | Valero Energy Corporation Quote
Baker Hughes BKR is scheduled to report quarterly earnings after the closing bell. The chances of a Houston, TX-based oil and gas equipment and services company delivering an earnings beat this time around are low, as it has an Earnings ESP of -2.28% and a Zacks Rank #3 at present.Baker Hughes is a global energy technology company that provides advanced solutions for oilfield services, equipment, and digital technologies, helping customers drive efficiency and sustainability across the energy value chain.
The Zacks Consensus Estimate for the company’s earnings is pegged at 61 cents per share, suggesting an 8.96% decrease from the prior-year reported figure. Regarding earnings surprises, BKR beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 11.46%.
This is depicted in the chart below:
Baker Hughes Company price-eps-surprise | Baker Hughes Company Quote
Expro Group Holdings XPRO is scheduled to report quarterly earnings before the opening bell. The chances of a Houston, TX-based oil and gas equipment and services company delivering an earnings beat this time around are low, as it has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. XPRO is a globally-operating energy services firm that supports oil and gas operators in more than 50 countries through well construction, well flow management, subsea well access and intervention & integrity solutions.
The Zacks Consensus Estimate for the company’s earnings is pegged at 23 cents per share, indicating results in line with the prior-year figure. Regarding earnings surprises, Expro Group Holdings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 50.83%.
This is depicted in the chart below:
Expro Group Holdings N.V. price-eps-surprise | Expro Group Holdings N.V. Quote
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).
| 2 hours | |
| 2 hours | |
| 4 hours | |
| 9 hours | |
| 9 hours | |
| 9 hours | |
| 9 hours | |
| 9 hours | |
| 9 hours | |
| 9 hours | |
| 10 hours | |
| 10 hours | |
| 11 hours | |
| 13 hours | |
| Oct-20 |
Join thousands of traders who make more informed decisions with our premium features. Real-time quotes, advanced visualizations, backtesting, and much more.
Learn more about FINVIZ*Elite