Ovintiv to Report Q4 Earnings: What's in Store for the Stock?

Ovintiv Inc. OVV is scheduled to release its fourth-quarter fiscal 2025 results on Feb. 23. The Zacks Consensus Estimate for earnings is pegged at 98 cents per share on revenues of $1.95 billion.

Let us examine the key drivers that might have impacted OVV's performance in the to-be-reported quarter. Before that, it is worth taking a look at the company’s performance in the last reported quarter.

Highlights of OVV’s Q3 Earnings & Surprise History

In the last reported quarter, Ovintiv posted third-quarter fiscal 2025 adjusted earnings per share of $1.03, which beat the Zacks Consensus Estimate of 97 cents, primarily due to higher plant condensate production volumes and average realized natural gas prices. Moreover, the company’s total revenues of $2.1 billion beat the Zacks Consensus Estimate by 6.1%.

OVV’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed in the other, delivering an average surprise of 11.06%.

This is depicted in the graph below: 

Ovintiv Inc. Price and EPS Surprise

 

Ovintiv Inc. price-eps-surprise | Ovintiv Inc. Quote

Trend in OVV’s Estimate Revision

The Zacks Consensus Estimate for fourth-quarter fiscal 2025 earnings has remained unchanged over the past seven days. The estimated figure indicates a 27.41% year-over-year decrease. Moreover, the Zacks Consensus Estimate for revenues implies a 10.96% increase from the year-ago period.

Factors to Consider Ahead of OVV’s Q4 Results

Ovintiv makes money by producing and selling crude oil, natural gas and natural gas liquids from its onshore operations in the United States and Canada. The company’s revenues are mainly driven by the volume it produces and the market prices of these energy commodities. It also focuses on improving profitability through efficient drilling, lower operating costs and financial hedging to manage price risks. OVV’s revenues are likely to have reduced in the quarter to be reported. The Zacks Consensus Estimate for fourth-quarter revenues is expected to have decreased from the year-ago quarter’s level.

The reduction in OVV's costs is expected to have positively impacted its bottom line. As per our model. OVV’s total operating expenses are projected to reach $1.6 billion in the fiscal fourth quarter, decreasing 28.2% from the year-ago quarter’s level of $2.2 billion. Production, mineral and other taxes are expected to fall 14.9% year over year to $63.9 million. Meanwhile, transportation and processing expenses are projected to come in at $341.8 million, down 14.3% from the same quarter last year.

The cost of purchased products is anticipated to drop significantly by 34% to $251.5 million. Depreciation, depletion and amortization charges are forecasted at $433.9 million, marking a 20.4% reduction. In addition, administrative expenses are estimated at $76.2 million, representing a notable 33.7% year-over-year decrease.

What Does Our Model Predict for OVV?

The proven Zacks model does not conclusively predict an earnings beat for OVV 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 is not the case here.

OVV’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is +0.44%.

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

OVV’s Zacks Rank: OVV currently carries a Zacks Rank #4 (Sell)

Stocks With the Favorable Combination

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

Jazz Pharmaceuticals plc JAZZ is a global biopharmaceutical company that develops and markets therapies for serious diseases, with a focus on neuroscience and oncology. Its portfolio includes treatments for sleep disorders, epilepsy and cancer. The company generates revenues mainly from the sale of its branded medicines worldwide. Jazz Pharmaceuticals has an Earnings ESP of +7.90% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Jazz Pharmaceuticals is scheduled to release earnings on Feb. 24. JAZZ’s earnings beat the Zacks Consensus Estimate in two of the four quarters and missed in the other two, delivering an average negative surprise of 10.48%.

Vaxcyte, Inc. PCVX has an Earnings ESP of +14.58% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Feb. 24. PCVX’s earnings missed the Zacks Consensus Estimate in three of the trailing four quarters and beat in one, delivering an average negative surprise of 2.75%. 

Vaxcyte is a clinical-stage biotechnology company focused on developing novel vaccines to prevent and treat infectious diseases. PCVX uses its proprietary platform to design next-generation conjugate and protein-based vaccines, with a primary focus on pneumococcal and other serious bacterial infections.

ACADIA Pharmaceuticals Inc. ACAD has an Earnings ESP of +14.92% and a Zacks Rank #3 at present.  The firm is scheduled to release earnings on Feb. 25. ACAD’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one, delivering an average surprise of 24.87%.

ACADIA Pharmaceuticals is a biopharmaceutical company that develops and commercializes treatments for central nervous system disorders. ACAD’s focus areas include neurological and rare diseases such as Parkinson’s disease, psychosis, Rett syndrome and schizophrenia, with revenues mainly generated from its approved therapies.

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This article originally published on Zacks Investment Research (zacks.com).

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