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Exterran (EXTN) Reports Q3 Loss, Misses Revenue Estimates

Exterran (EXTN) delivered earnings and revenue surprises of 42.68% and -4.01%, respectively, for the quarter ended September 2021. Do the numbers hold clues to what lies ahead for the stock?

This story originally appeared on Zacks

Exterran (EXTN) came out with a quarterly loss of $0.47 per share versus the Zacks Consensus Estimate of a loss of $0.82. This compares to loss of $0.48 per share a year ago. These figures are adjusted for non-recurring items.

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This quarterly report represents an earnings surprise of 42.68%. A quarter ago, it was expected that this provider of services for the oil and natural gas industry would post a loss of $0.67 per share when it actually produced a loss of $0.83, delivering a surprise of -23.88%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Exterran, which belongs to the Zacks Oil and Gas - Mechanical and and Equipment industry, posted revenues of $161.3 million for the quarter ended September 2021, missing the Zacks Consensus Estimate by 4.01%. This compares to year-ago revenues of $169.51 million. The company has not been able to beat consensus revenue estimates over the last four quarters.

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

Exterran shares have lost about 1.4% since the beginning of the year versus the S&P 500's gain of 22.8%.

What's Next for Exterran?

While Exterran has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. 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 this earnings release, the estimate revisions trend for Exterran was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform 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 coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.56 on $203.4 million in revenues for the coming quarter and -$2.69 on $653.7 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Mechanical and and Equipment is currently in the bottom 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

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