Magnolia Oil & Gas to Post Q3 Earnings: What's in Store for the Stock?

Core Viewpoint - Magnolia Oil & Gas Corporation (MGY) is expected to report third-quarter 2025 earnings on October 29, with earnings estimated at 41 cents per share and revenues at $319.2 million, reflecting a year-over-year decline in revenues and earnings [1][8]. Group 1: Recent Performance - In the last reported quarter, MGY achieved a net profit of 43 cents per share, exceeding the Zacks Consensus Estimate of 40 cents, driven by increased production volumes and strong well productivity in the Giddings asset [2]. - Total revenues for the last quarter were $319 million, surpassing the Zacks Consensus Estimate of $314 million, with MGY delivering an average surprise of 6.5% over the last four quarters [2]. Group 2: Estimate Revisions - The Zacks Consensus Estimate for third-quarter 2025 earnings has increased by 2.5% in the past week, although it indicates a 21.2% decrease year-over-year [3]. - Revenue estimates for the third quarter show a decline of 4.2% compared to the previous year [3]. Group 3: Operational Insights - MGY generates revenues by acquiring land or leases with oil and natural gas reserves, primarily in South Texas, focusing on areas like the Eagle Ford Shale and Austin Chalk [4]. - The company is expected to see a decrease in total revenues in the upcoming quarter, with a projected revenue drop from $333.1 million in the year-ago quarter [5]. - Despite an anticipated increase in total production volumes, the average realized price is expected to decline, which may impact profitability [5]. Group 4: Cost and Production Outlook - Gathering, transportation, and processing expenses are projected to reach $16.2 million in the third quarter, a 51.4% increase from $10.7 million in the same quarter last year [5]. - Positive factors include an expected boost in production volumes and an increase in the average realized price of natural gas liquids and natural gas, which may help offset higher operating costs [6][8]. Group 5: Earnings Prediction - The Zacks model does not predict a definitive earnings beat for MGY this season, as the combination of a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 is not present [7]. - MGY's Earnings ESP stands at +2.06%, indicating a slight positive outlook, but the overall ranking is 4 (Sell) [9].