Magnolia Oil & Gas CorporationMGY is set to report third-quarter 2026 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at 51 cents per share and the same for revenues is pinned at $447.7 million.
Let us delve into the factors that might have influenced MGY'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 MGY's Q2 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based oil and gas exploration and production company reported a net profit of 99 cents per share, which beat the Zacks Consensus Estimate of 90 cents. This was primarily driven by higher oil and NGL prices and growth in overall production volumes. The company's total revenues were $479 million, which surpassed the Zacks Consensus Estimate of $440 million. MGY's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 4.7%. This is depicted in the graph below:
Magnolia Oil & Gas Corp Price and EPS Surprise
Magnolia Oil & Gas Corp price-eps-surprise | Magnolia Oil & Gas Corp Quote
Trend in MGY's Estimate Revision
The Zacks Consensus Estimate for third-quarter 2026 earnings has witnessed an upward movement of 4.1% in the past seven days. The estimated figure indicates a 24.4% year-over-year increase. Additionally, the Zacks Consensus Estimate for revenues indicates growth of 37.8% from the year-ago period's level.
Factors to Consider Ahead of MGY's Q3 Release
Magnolia Oil & Gas generates revenues by acquiring land or leases with oil and natural gas reserves, primarily in South Texas. The firm explores these properties, drills wells to extract the oil and gas, and sells the resources to other energy companies. By focusing on areas such as the Eagle Ford Shale and Austin Chalk, MGY profits from the difference between the costs of drilling and production and the income from selling the extracted oil and gas.
Magnolia Oil & Gas could benefit from sustained well performance at Giddings, which prompted management to raise its stand-alone 2026 production growth outlook to 6%. Third-quarter output is expected to hold near 106,000 BOE per day, while planned drilling and completion spending falls to $115 million, supporting margins and an earnings beat. MGY's total revenues are expected to have increased in the quarter to be reported. The Zacks Consensus Estimate predicts third-quarter revenues to increase from the year-ago quarter's $324.9 million.
Magnolia Oil & Gas expects third-quarter production of around 106,000 BOE per day, broadly unchanged from the second quarter, limiting sequential volume-driven earnings growth. Oil realizations are projected at a $3-per-barrel discount to the Magellan East Houston benchmark, which could weigh on revenues. The WildFire acquisition closed late in the quarter, leaving limited time for acquired production to contribute while introducing transaction-related uncertainty. Moreover, the issuance of 53.3 million shares and $500 million in senior notes could pressure per-share earnings through dilution and higher interest expense. Greater leverage and integration demands could further constrain near-term financial performance. Per our model, while total production volumes are expected to have increased sequentially, the total realized price is likely to have declined in the forthcoming quarter. The company's total operating expenses are also expected to increase year over year. This decrease in the average sales prices and an increase in the expenses may affect MGY's profitability in the quarter to be reported.
What Does Our Model Predict for MGY?
The proven Zacks model does not conclusively predict an earnings beat for Magnolia Oil & Gas 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. However, that is not the case here.
Earnings ESP of MGY:Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
MGY's Zacks Rank:MGY currently carries a Zacks Rank #3.
Stocks With the Favorable Combination
Here are some firms from the energy space that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.
ConocoPhillipsCOP has an Earnings ESP of +4.50% and a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
COP is scheduled to release earnings on Nov. 05. Notably, ConocoPhillips' earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the remaining one, delivering an average surprise of 7%. Valued at around $179.1 billion, COP's shares have gained 71.2% in a year.
Targa Resources Corp.TRGP has an Earnings ESP of +2.05% and a Zacks Rank #2 at present. TRGP is slated to release earnings on Nov. 05.
The Zacks Consensus Estimate for TRGP's 2026 earnings indicates 34.5% year-over-year growth.Valued at around $65.6 billion, TRGP's shares climbed 107.9% in a year.
Calumet, Inc.CLMT has an Earnings ESP of +48.76% and a Zacks Rank #2 at present. It is scheduled to release earnings on Nov. 06.
Calumet's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the remaining one, delivering an average surprise of 33%. Valued at around $4.4 billion, CLMT's shares have surged 150% in a year.
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Magnolia Oil & Gas Corp (MGY) : Free Stock Analysis Report
ConocoPhillips (COP) : Free Stock Analysis Report
Calumet, Inc. (CLMT) : Free Stock Analysis Report
Targa Resources, Inc. (TRGP) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
