Gevo, Inc.
GEVO
is set to report fourth-quarter 2020 results on Mar 17, after market close. In the last reported quarter, the company delivered an earnings surprise of 11.11%.
However, in the trailing four quarters, Gevo came up with a negative earnings surprise of 39.47%, on average.
Let’s take a closer look at the factors likely to influence the company’s upcoming quarterly results.
Factors to Consider
Owing to COVID-19 impacts and unfavorable commodity environment, Gevo terminated its production of ethanol and distiller’s grains in March 2020 at the Luverne facility, which has been hurting its top line performance since then. The company also suspended ethanol production at its Luverne facility. We expect its fourth-quarter sales to have also suffered due to the absence of these product lines.
Notably, the Zacks Consensus Estimate for Gevo’s fourth-quarter revenues, pegged at $0.76 million, indicates a 89% decline from the year-ago quarter’s reported figure.
While termination of ethanol and distiller’s grains must have hampered the company’s top line performance, cost of production is expected to have reduced in the fourth quarter. This is likely to have benefited its quarterly gross profit, thereby bolstering its bottom-line performance.
Moreover, to restrict huge cash burn, Gevo has been reducing its workforce, which, in turn must have reduced its personnel expenses. This is also expected to have benefited the company’s earnings in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for fourth-quarter loss per share is pegged at 4 cents indicating an improvement from the year-ago quarter’s loss of 50 cents.
Earnings Whispers
Our proven model predicts an earnings beat for Gevo 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 an earnings beat.
Earnings ESP
: Gevo has an Earnings ESP of +25.00%. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter
.
Zacks Rank
: The company carries a Zacks Rank #3. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
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