HollyFrontier (HFC) Reports Q4 Loss, Top Revenue Estimates

HollyFrontier (HFC) came out with a quarterly loss of $0.11 per share compared to the Zacks Consensus Estimate of a loss of $0.02. For comparison, a year earlier the loss was $0.74 per share. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of -450%. A quarter ago, it was expected that this independent energy company would post earnings of $0.77 per share when it actually produced earnings of $1.28, delivering a surprise of 66.23%.

The company has topped consensus EPS estimates twice over the last four quarters.

HollyFrontier, which belongs to the Zacks Oil and Gas – Refining and Marketing industry, posted revenues of $5.62 billion for the quarter ended December 2021, surpassing the Zacks Consensus Estimate by 32.18%. For comparison, year-ago revenues were $2.9 billion. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Shares of HollyFrontier are up about 5.1% year to date compared with the S&P 500 Index’s decline of -9.7%.

What’s next for HollyFrontier?

While HollyFrontier has outperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for HollyFrontier is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $0.55 on $4.75 billion in revenues for the coming quarter and $3.77 on $23.4 billion in revenues for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, the Oil & Gas – Refining and Marketing industry is currently in the top 20% of over 250 Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

World Fuel Services (INT), another company in the same industry, is yet to release results for the quarter ended December 2021. The results are expected to be released on February 24.

In its upcoming report, the ship, jet and truck servicing company is expected to post quarterly earnings of $0.26 per share, representing a +1,200% year-over-year change. The consensus EPS estimate for the quarter has not changed over the last 30 days.

World Fuel Services’ revenue is expected to be $8.36 billion, up 77.7% from the same quarter last year.

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