Texas Pacific Land Corporation TPL is set to release third-quarter 2026 results on Nov. 4, after market close. The Zacks Consensus Estimate for earnings is $2.35 per share on revenues of $264 million.
Let’s delve into the factors that might have influenced the Permian Basin landowner’s results for the September quarter. But it’s worth taking a look at TPL’s previous-quarter performance first.
Highlights of Previous Quarter Earnings & Surprise History
In the last reported quarter, the company, which generates its revenues primarily from oil and natural gas royalties, beat the consensus mark on strong royalty production and water sales. Texas Pacific Land reported net income per share of $2.23, topping the Zacks Consensus Estimate of $2.14. Revenues of $246.1 million beat the Zacks Consensus Estimate by 1.3%.
TPL beat the Zacks Consensus Estimate in three of the last four quarters. This is depicted in the graph below:
Texas Pacific Land Corporation Price and EPS Surprise
Texas Pacific Land Corporation price-eps-surprise | Texas Pacific Land Corporation 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 33.5% increase year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 30% improvement from the year-ago period.
Factors to Consider
Texas Pacific Land's oil and gas royalty business likely benefited from sustained production growth in the third quarter of 2026. Royalty production reached a record 39,700 barrels of oil equivalent per day in the second quarter, increasing 20% year over year and 7% sequentially. Additionally, its inventory of 18.4 net wells awaiting production, including 9.5 drilled-but-uncompleted wells, provided visibility into future output. Continued well completions and contributions from acquired royalty assets could support production volumes, strengthening royalty revenues and earnings for the quarter.
Growing demand for produced water transportation and disposal services will likely back TPL's third-quarter 2026 performance. Produced water royalty volumes reached approximately 4.9 million barrels per day in the second quarter, rising 15% year over year and 6% sequentially. This drove royalty revenues to $37.1 million compared with $33.5 million in the preceding quarter. Higher water production from existing wells, increased demand for disposal capacity and contractual price escalators could have lifted royalty collections. Moreover, this business generates high-margin revenues without requiring significant direct operating or capital expenditures.
On a bearish note, reduced drilling and completion activity in the Delaware Basin could weigh on Texas Pacific Land’s third-quarter 2026 water sales revenues. During the second quarter, water sales volumes declined 19% sequentially to 663,000 barrels per day, while revenues fell to $39.7 million from $46.9 million. Weak regional natural gas prices prompted operators to shift development away from the Delaware Basin, affecting water demand. Although management anticipated improving gas price differentials as additional pipeline capacity entered service over subsequent quarters, the timing of this recovery remained uncertain, potentially limiting near-term earnings growth.
What Does Our Model Say?
The proven Zacks model does not conclusively predict an earnings beat for Texas Pacific Land 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: TPL has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.35 per share each.
Zacks Rank: Texas Pacific Land 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 Texas Pacific Land, here are some energy firms that you may want to consider on the basis of our model:
Permian Resources PR has an Earnings ESP of +6.24% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov. 4.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Permian Resources beat the Zacks Consensus Estimate for earnings in each of the last four quarters, with the average being 20.3%. Valued at more than $21 billion, PR has surged 103.5% in a year.
Solaris Energy Infrastructure SEISEI has an Earnings ESP of +8.00% and a Zacks Rank #1. The firm is scheduled to release earnings on Nov. 4.
The Zacks Consensus Estimate for 2026 earnings of Solaris Energy Infrastructure indicates 13.6% growth. Valued at around $5.3 billion, SEI is up 29.8% in a year.
Targa Resources TRGP has an Earnings ESP of +2.05% and a Zacks Rank #2. The firm is scheduled to release earnings on Nov. 5.
The Zacks Consensus Estimate for 2026 earnings of Targa Resources indicates 34.5% growth. Valued at around $65.6 billion, TRGP is up 102.7% in a year.
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Texas Pacific Land Corporation (TPL): Free Stock Analysis Report
Targa Resources, Inc. (TRGP): Free Stock Analysis Report
Permian Resources Corporation (PR): Free Stock Analysis Report
Solaris Energy Infrastructure, Inc. (SEI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).