Can Baytex Energy Q4 Earnings Overcome Oil Price Weakness?

Baytex Energy Corp. BTE is set to release fourth-quarter 2025 results on March 4. The Zacks Consensus Estimate for earnings is 2 cents per share on revenues of $545.6 million.

Let’s delve into the factors that might have influenced the Canadian energy company’s results for the December quarter. But it’s worth taking a look at BTE’s previous-quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, the Calgary-based upstream operator beat the consensus mark on the back of strong production volumes. Baytex had reported adjusted earnings per share of 3 cents, topping the Zacks Consensus Estimate of a penny. Revenues of $634 million also beat the Zacks Consensus Estimate by nearly 18%.

Baytex beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two, resulting in an earnings surprise of 19.2%, on average. This is depicted in the graph below:

Baytex Energy Corp Price and EPS Surprise

Baytex Energy Corp price-eps-surprise | Baytex Energy Corp Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the third-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 150% increase year over year. The Zacks Consensus Estimate for revenues, however, suggests a 24.9% decline from the year-ago period.

Factors to Consider

Production from BTE’s Pembina Duvernay assets hit a record 10,185 barrels of oil equivalent per day (Boe/d) in the third quarter, up 53% sequentially, with two new wells delivering average 30-day peak rates of roughly 1,380 Boe/d. Management also reported an 11% reduction in drilling and completion costs year over year. With infrastructure commissioned and acreage consolidated, the asset is positioned for scaled development into 2026. This stronger exit rate and improved capital efficiency could have lifted fourth-quarter production and margins, supporting free cash flow.

Despite operational strength, management reduced its 2025 free cash flow outlook to about C$300 million from C$400 million, citing weaker second-half commodity prices. During the third quarter, WTI averaged about $65 per barrel, and the December quarter planning assumes a $60 pricing. Investors should know that revenues declined 16.5% year over year in the third quarter. With subdued oil prices persisting through the fourth quarter, realized pricing and operating netbacks may have remained under pressure, limiting earnings growth even with stable production.

What Does Our Model Say?

The proven Zacks model does not conclusively predict an earnings beat for Baytex Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: BTE has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 2 cents per share each.

Zacks Rank: Baytex Energy currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.

Stocks to Consider

While an earnings beat looks uncertain for Baytex Energy, here are some firms that you may want to consider on the basis of our model:

California Resources CRC has an Earnings ESP of +1.03% and a Zacks Rank #3. The firm is scheduled to release earnings on March 2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

California Resources beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 14%. Valued at around $4.9 billion, CRC has gained 28.4% in a year.

Adobe Inc. ADBE has an Earnings ESP of +0.04% and a Zacks Rank #3. The firm is scheduled to release earnings on March 12.

The Zacks Consensus Estimate for fiscal 2026 earnings of Adobe indicates 12.1% growth. Valued at more than $100 billion, ADBE is down 41% in a year.

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This article originally published on Zacks Investment Research (zacks.com).

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