Earnings Report: International Petroleum Corporation Missed Revenue Estimates By 8.0%

International Petroleum Corporation (TSE:IPCO) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to CA$14.33 in the week after its latest yearly results. Revenues came in 8.0% below expectations, at US$854m. Statutory earnings per share were relatively better off, with a per-share profit of US$1.28 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for International Petroleum

After the latest results, the five analysts covering International Petroleum are now predicting revenues of US$915.4m in 2024. If met, this would reflect a modest 7.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to plummet 31% to US$0.94 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$925.5m and earnings per share (EPS) of US$1.27 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

The consensus price target held steady at CA$16.68, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values International Petroleum at CA$17.94 per share, while the most bearish prices it at CA$15.50. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that International Petroleum's revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.4% annually. So it's pretty clear that, while International Petroleum's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for International Petroleum. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for International Petroleum going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for International Petroleum (1 is a bit concerning) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.