Vår Energi AS Just Missed EPS By 38%: Here’s What Analysts Think Will Happen Next

Seriously, folks, this is getting old. Vår Energi AS (OB:VAR) just missed its earnings per share (EPS) estimate by a whopping 38%, and if you’re an investor, you’re probably wondering what’s going on. As the self-proclaimed mall mole of the financial world, I’ve been digging into this company’s numbers, and let me tell you, the clues are piling up faster than a Black Friday sale.

The Mystery of the Missing Earnings

First, let’s set the scene. Vår Energi is a Norwegian oil and gas company with a solid reputation and a strong position on the Norwegian Continental Shelf. But lately, it’s been playing a game of “almost” with its earnings. The full-year 2024 results showed revenue of US$7.4 billion, which was 3.3% below expectations. And the EPS? A massive 59% miss, reporting US$0.11 against a forecasted US$0.26. That’s not just a miss—that’s a full-on earnings mystery.

The pattern continued into the third quarter of 2024, with revenue reaching US$1.87 billion (a 16% year-over-year increase, but still below expectations). And the fourth-quarter production? 278 thousand barrels of oil equivalent per day (mboe/d), missing predictions of 292-294 mboe/d. Analysts are starting to scratch their heads, and investors are getting nervous.

The Dividend Dilemma

Now, let’s talk about the elephant in the room—the dividend. Vår Energi has a dividend policy that distributes 20-30% of cash flow from operations after taxes, offering an attractive yield of 15.47%. Sounds great, right? But here’s the catch: the payout ratio is a staggering 394.94%. That’s not a typo. The company is paying out more in dividends than it’s earning, which is a red flag for long-term sustainability.

Over the past decade, dividend payments have decreased, and the current payout ratio suggests that the dividend may not be fully covered by earnings. If earnings continue to underperform, this could spell trouble for investors relying on that juicy yield.

The P/E Puzzle

The price-to-earnings (P/E) ratio is another piece of the puzzle. Vår Energi’s P/E ratio stands at 13.6x, which might seem reasonable at first glance. But here’s the twist: analysts are beginning to recognize that the company’s inferior earnings outlook isn’t fully reflected in its P/E ratio. This could mean that the stock is overvalued, and further price adjustments might be on the horizon.

The Market Context

Let’s zoom out for a second. Vår Energi isn’t the only company struggling with earnings misses. Other energy sector players like TotalEnergies and Constellation Energy have also disappointed investors, as have tech companies like Super Micro Computer and Micro-Star International. This suggests a broader market challenge, but Vår Energi’s situation is unique due to the consistent nature of its misses and the subsequent analyst revisions.

The Future Outlook

So, what’s next for Vår Energi? The company’s most recent earnings release is scheduled for July 22, 2025, with an anticipated EPS of $0.0984 based on current consensus estimates. But given the history of misses, it’s anyone’s guess whether this target will be achieved.

Despite the setbacks, Vår Energi has some strong points. It boasts a robust return on equity (ROE) of 67%, indicating efficient capital utilization and strong profitability. And its strategic position on the Norwegian Continental Shelf provides a degree of resilience.

The Bottom Line

Investors considering Vår Energi should carefully weigh the company’s strengths—its ROE, dividend yield, and strategic position—against the risks associated with its recent earnings performance and the potential for continued forecast revisions. The company’s financial calendar provides key dates for future reports and presentations, offering opportunities for investors to monitor performance and assess the validity of revised forecasts.

In the end, it’s a classic case of “buyer beware.” The clues are there, but the mystery remains unsolved. As the mall mole, I’ll keep digging, but for now, it’s a waiting game. Stay tuned, folks—this story is far from over.