Are These 3 Energy Stocks Set to Beat Q4 Earnings Estimates?

The contrast between oil and natural gas trends is setting up an interesting earnings season for the energy sector. While crude prices were notably weaker year over year in the fourth quarter, natural gas prices moved higher across all three months. At the same time, softer demand tied to slower economic activity and trade tariff uncertainties has added another layer of complexity. Could certain energy stocks outperform expectations and deliver results that are better than what was anticipated?

Quarterly Review of Oil & Natural Gas Pricing vs. Year-Ago Period

Investors should know that there is a high correlation between commodity prices and the earnings of energy companies.

So, how does the price of oil and gas compare with the year-ago period?

Per data from the U.S. Energy Information Administration, in October, November and December 2024, the average monthly WTI crude price was $71.99, $69.95 and $70.12 per barrel, respectively. In 2025, the average prices were $60.89 in October, $60.06 in November and $57.97 in December, i.e., much weaker year over year. The primary driver of this drop was an ongoing global oversupply that outpaced the demand growth. OPEC+ nations also began to roll back their voluntary production cuts in September, increasing supply.

However, the news is bullish on the natural gas front. In 2024, U.S. Henry Hub average natural gas prices were $2.20 per million British thermal units (MMBtu) in October, which slid to $2.12 in November before edging up to $3.01 in December. Coming to 2025, the fuel traded at $3.19, $3.79 and $4.26 per MMBtu in October, November and December, respectively. In other words, natural gas traded noticeably higher in all three months year over year.

How Low Oil Prices Are Affecting the Energy Sector's Q4 Earnings

Approximately 45.8% of S&P 500 oil and energy companies have released their fourth-quarter results so far. The latest Zacks Earnings Trends report indicates that the sector’s fourth-quarter performance has improved meaningfully compared to earlier projections. Companies that have reported are delivering robust earnings growth, with earnings rising 27.1% year over year despite a modest 1.3% decline in revenues. Performance quality has also been strong, as 81.8% of these companies surpassed both EPS and revenue expectations.

When looking at the full sector-wide blended outlook for fourth-quarter 2025, which combines both reported and estimated results, the picture has strengthened significantly. The updated blended estimate now calls for earnings growth of 13.7% year over year, marking a strong acceleration from the modest 3.2% growth seen in the third quarter. However, this earnings improvement came despite weak top-line momentum, as the fourth-quarter revenues are projected to decline slightly by 0.4%, indicating that profit gains were likely driven by margin expansion, cost discipline and operating leverage rather than volume growth. Furthermore, the sector's projected net margin for the fourth quarter is a healthy 1.08%.

Oil/Energy Companies’ Earnings in Focus

In light of this context, let’s explore how the following oil and energy companies are shaping up ahead of their fourth-quarter earnings reports on Feb. 19, and how they’re poised to tackle the challenges they face.

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

Let’s explore three prominent companies and evaluate how they are positioned before their fourth-quarter earnings release.

TechnipFMC plc FTI is scheduled to report quarterly earnings before the market opens. The chances of this Newcastle & Houston-based company delivering an earnings beat this time around are high, as it has an Earnings ESP of +1.61% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company is engaged in designing, producing and servicing technologically sophisticated systems and products for subsea, onshore/offshore, and surface projects.

The Zacks Consensus Estimate for FTI’s earnings is pegged at 51 cents per share, indicating a 5.6% decrease from the prior-year reported figure. FTI’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing once, delivering an average surprise of 20.2%.

This is depicted in the chart below:

TechnipFMC plc Price and EPS Surprise

TechnipFMC plc price-eps-surprise | TechnipFMC plc Quote

On the other hand, Transocean Ltd. RIG is scheduled to report quarterly earnings following the market's close. Our proven model predicts an earnings beat for Transocean this time around. This is because it has an Earnings ESP of +5.88% and a Zacks Rank #3 at present.

Transocean is the world’s largest offshore drilling contractor and leading provider of drilling management services. The company provides rigs on a contractual basis to explore and develop oil and gas. 

The Zacks Consensus Estimate for Transocean’s earnings is pegged at 9 cents per share, indicating a 200% increase from the prior-year reported figure. RIG’s earnings beat the Zacks Consensus Estimate thrice in the last four quarters and missed once.

This is depicted in the chart below:

Transocean Ltd. Price and EPS Surprise

Transocean Ltd. price-eps-surprise | Transocean Ltd. Quote

Finally, Targa Resources Corp. TRGP is scheduled to report quarterly earnings before the opening bell. Things are looking bright for Targa Resources this time around, as it has an Earnings ESP of +0.18% and carries a Zacks Rank #3 at present.

Targa Resources is a premier energy infrastructure company. A leading provider of integrated midstream services in North America, the company primarily derives its revenues from gathering, compressing, treating, processing and selling natural gas.

The Zacks Consensus Estimate for TRGP’s earnings is pegged at $2.37 per share, indicating a 64.6% increase from the prior-year reported figure. TRGP’s earnings beat the Zacks Consensus Estimate once in the last four quarters while missing thrice, delivering an average negative surprise of 7.5%.

This is depicted in the chart below:

Targa Resources, Inc. Price and EPS Surprise

Targa Resources, Inc. price-eps-surprise | Targa Resources, Inc. Quote

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

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