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The oil/energy sector has faced significant headwinds in the first quarter of 2025, with shifting commodity prices and broader market uncertainties creating a tough operating environment. While oil prices declined due to weaker demand and increased supply, natural gas prices saw an uptick, presenting a mixed landscape for oil/energy companies. While expectations are low heading into earnings season, that opens the door for potential surprises. Could some oil/energy stocks defy the chances and deliver better-than-expected results?
Let’s take a look at four key players and see how they’re positioned ahead of their first-quarter earnings reports.
In the first quarter of 2025, there was a sharp decline in oil prices. The average price of West Texas Intermediate crude dropped to $71.84 per barrel, down from the prior year's figure of $77.56. Oil prices deteriorated in first-quarter 2025 due to concerns over weaker global economic growth, increased oil supply from non-OPEC+ nations and potential OPEC+ output rises, and lower-than-expected demand. Escalating trade tensions and a build-up in oil inventories further contributed to this downward pressure.
At the same time, natural gas prices also saw an increase, with the Henry Hub spot price averaging $4.15 per million British thermal units (“MMBtu”), up from $2.13 per MMBtu in the prior-year quarter. Natural gas prices increased significantly in the first quarter of 2025, primarily due to colder-than-normal weather, which boosted heating demand and led to large storage withdrawals. Additionally, rising LNG exports contributed to the increased demand and tighter supply, pushing prices upward.
Ongoing volatility in oil and natural gas prices puts fresh pressure on the oil/energy sector’s earnings. According to the latest Zacks Earnings Trends report, oil/energy companies in the S&P 500 are projected to report an 11.1% year-over-year earnings decline for the first quarter of 2025. This marks a continuation of the downward trajectory, following a steep drop in the previous quarter.
In comparison, earnings for the broader S&P 500 are expected to rise 6.8%, highlighting the oil/energy sector’s underperformance. Excluding oil/energy, the S&P 500 would have registered a more robust 8% earnings growth, reinforcing how much the sector is dragging on overall index performance.
Revenue trends are also weak for oil/energy companies, with a projected 0.4% year-over-year decline, even as S&P 500 revenues as a whole are on track to grow 3.9%. The divergence reflects how the oil/energy sector is struggling to maintain top-line growth in a shifting commodity environment.
Despite higher natural gas prices, the earnings drag from lower oil prices continues to dominate. This imbalance is compressing margins and making it more difficult for companies to deliver consistent results. Some companies may look to operational efficiencies or portfolio adjustments to adapt, but the overall environment remains challenging.
Meanwhile, other sectors are booming. Earnings growth in areas like Technology (+12.5%), Medical (+34.7%) and Utilities (+14.1%) shows where investor interest is shifting. The oil/energy sector is the worst performer, declining alongside other weak sectors, such as autos, conglomerates, and basic materials, all of which are experiencing significant drops.
Despite the rise in natural gas prices, the continued weakness in oil prices is the dominant factor, compressing margins and making it challenging for oil/energy companies to deliver consistent results. Some companies may look to operational efficiencies or portfolio adjustments to adapt, but the overall environment remains challenging.
With this context in mind, let us examine how the following oil/energy companies are placed ahead of their first-quarter earnings releases slated for April 24 and how they are positioned to weather this storm.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
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 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 -0.92% and a Zacks Rank #3 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 TechnipFMC’s earnings is pegged at 36 cents per share, suggesting a 63.64% increase from the prior-year reported figure. Regarding earnings surprises, FTI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 48.65%. (read more: TechnipFMC to Report Q1 Earnings: What's in Store for the Stock?)
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 after the closing bell. 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 -14.71% and a Zacks Rank #3 at present.
Valero Energy is a major oil refining and fuel marketing company that produces gasoline, diesel, and other fuels sold to consumers and businesses. The Zacks Consensus Estimate for the company’s earnings is pegged at 43 cents per share, suggesting an 88.74% decrease 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 101.16%.
This is depicted in the chart below:
Valero Energy Corporation price-eps-surprise | Valero Energy Corporation Quote
RPC, Inc. RES is scheduled to report quarterly earnings before the opening bell. The chances of an Atlanta, GA-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.
RPC is an oilfield services company that supplies equipment and services to help oil and gas companies drill and maintain wells. The Zacks Consensus Estimate for the company’s earnings is pegged at 7 cents per share, suggesting a 46.15% decrease from the prior-year reported figure. Regarding earnings surprises, RPC’s earnings beat the Zacks Consensus Estimate twice in the last four quarters and missed twice, delivering an average negative surprise of 12.98%.
This is depicted in the chart below:
RPC, Inc. price-eps-surprise | RPC, Inc. Quote
CNX Resources Corporation CNX is scheduled to report quarterly earnings after the closing bell. The chances of a Canonsburg, PA-based oil and gas exploration and production company delivering an earnings beat this time around are low, as it has an Earnings ESP of -2.96% and a Zacks Rank #3 at present.
CNX Resources is an independent natural gas and midstream company focused on acquiring, exploring, developing, and producing natural gas assets in the Appalachian Basin. The Zacks Consensus Estimate for CNX Resources’ earnings is pegged at 65 cents per share, suggesting a 44.44% increase from the prior-year reported figure. Regarding earnings surprises, CNX’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 29.76%. (read more:
CNX Resources to Release Q1 Earnings: Here's What to Expect )
This is depicted in the chart below:
CNX Resources Corporation. price-eps-surprise | CNX Resources Corporation. Quote
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This article originally published on Zacks Investment Research (zacks.com).
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