Earnings Beat: Offshore Oil Engineering Co.,Ltd Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a pretty great week for Offshore Oil Engineering Co.,Ltd (SHSE:600583) shareholders, with its shares surging 11% to CN¥5.60 in the week since its latest yearly results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥30b, statutory earnings beat expectations 9.3%, with Offshore Oil EngineeringLtd reporting profits of CN¥0.49 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Offshore Oil EngineeringLtd

Taking into account the latest results, the current consensus from Offshore Oil EngineeringLtd's six analysts is for revenues of CN¥33.2b in 2025. This would reflect a meaningful 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to climb 14% to CN¥0.56. In the lead-up to this report, the analysts had been modelling revenues of CN¥35.7b and earnings per share (EPS) of CN¥0.49 in 2025. Although the analysts have lowered their revenue forecasts, they've also made a decent improvement in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus has made no major changes to the price target of CN¥6.63, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Offshore Oil EngineeringLtd, with the most bullish analyst valuing it at CN¥7.00 and the most bearish at CN¥6.40 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Offshore Oil EngineeringLtd is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Offshore Oil EngineeringLtd's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. So it's pretty clear that, while Offshore Oil EngineeringLtd's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Offshore Oil EngineeringLtd's earnings potential next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. With that said, earnings are more important to the long-term value of the business. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Offshore Oil EngineeringLtd. Long-term earnings power is much more important than next year's profits. We have forecasts for Offshore Oil EngineeringLtd going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Offshore Oil EngineeringLtd you should know about.

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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.