It’s a big week for stock investors, with several top U.S. companies reporting their third-quarter earnings. Most experts expect earnings to be poor, with the trends seen earlier in the year projected to continue into the third and fourth quarters. Nevertheless, there are multiple stocks to watch that could potentially deliver an earnings smasher.

Company earnings drive stock prices. Firms can reinvest profits and potentially return earnings to stockholders as dividends. Moreover, some of the most powerful companies may also report a drop in quarterly profits, but sustained earnings growth typically correlates to higher stock prices over time.

However, for the stock market, guidance is what will move prices. The equity market is forward-looking, and companies that report financials in line with expectations may not see their stock move much. Considering that, the seven stocks discussed in the article will likely outperform and deliver earnings well ahead of consensus estimates.

MA	Mastercard	$311.41
TTE	TotalEnergies	$52.77
CAT	Caterpillar	$194.84
PXD	Pioneer Natural Resources	$264.83
EQNR	Equinor	$34.15
KLAC	KNA Corporation	$304.87
SU	Suncor Energy	$33.44

Mastercard (MA)

• Consensus EPS forecast: $2.57
• Last Years EPS: $2.37

Mastercard (NYSE:MA) is one of the most reputable names in the global payments sector, offering various payment solutions under its popular brands. Over the years, it has evolved into more than a payments processor, dabbling into value-added services which often complement its payment network offerings. Hence, it continues to benefit from networking effects and its massive scale.

With a steep drop in travel demand during the pandemic, Mastercard saw a massive drop in its top and bottom-line results. However, in the past year, it has picked up the pace and continues to post strong results on the back of robust consumer spending. Its second-quarter earnings saw a healthy 58% bump in cross-border transactions, with its adjusted EPS of $2.56 beating estimates by a comfortable margin. Analysts expect another blow-out performance in the third quarter, which bodes well for MA stock investors.

TotalEnergies (TTE)

• Consensus EPS forecast: $3.91
• Last Years EPS: $1.76

TotalEnergies (NYSE:TTE) is an oil and gas giant with an impeccable track record of growing its top and bottom-line results. It has benefitted along with its peers due to higher oil prices in the year’s first half, posting record cash flow numbers. It generated sizeable free cash flows of $20 billion during the first half, with $10.8 billion in the second quarter alone. Third-quarter results are expected to soften versus the second quarter, but it should still produce sizeable free cash flows.

Furthermore, the firm has done a remarkable job of developing top-shelf oil-producing assets. Its investment criterion for new assets is to be profitable under $30 per barrel after taxes. With oil prices expected to normalize in the future, such an investment criterion bodes remarkably well for the company’s long-term profitability. Thus, it is one of the stocks to watch for more gains.

Caterpillar (CAT)

• Consensus EPS forecast: $3.21
• Last Years EPS: $2.66

Caterpillar (NYSE:CAT) is one of the biggest names in machinery, best known for its ubiquitous construction equipment. Its sales mix has evolved over the years, including large resource industries and energy and transportation equipment businesses. Moreover, in reducing the cyclicality of its business, it has invested heavily in its services and aftermarkets segment, which could double in sales to $28 billion by 2026.

A myriad of headwinds has weighed down CAT’s results of late. Some headwinds include slowing growth in China, a weak U.S. construction market, and foreign exchange pressures. However, its diverse sales mix has helped it navigate current headwinds. It expects to post an incredible operating profit margin in the year’s second half, with higher sales volumes and price realization. Also, CAT has done a great job of offsetting costs with increased pricing, a theme that should continue into the third quarter.

Pioneer Natural Resources (PXD)

• Consensus EPS forecast: $7.65
• Last Years EPS: $4.13

Pioneer Natural Resources (NYSE:PXD) is an integrated oil and gas player with substantial acreage in the Permian Basin, one of the world’s largest hydrocarbon-producing basins. It is among the lowest-cost producers in the Basin, enabling it to produce a gusher of cash flows in recent quarters, fueled by higher oil prices.

PXD’s second quarter results have shown a 68% increase in output from the prior-year period, near the top-end of its guidance. Consequently, the excess cash flows were returned to stockholders, with a trailing dividend yield of over 9.5%. It announced $1.51 per share in its inaugural variable dividend, roughly three times its regular quarterly payout. As we advance, the firm is expected to continue raising dividend payouts for the foreseeable future. This makes PXD a stock to watch for those seeking more dividends.

Equinor (EQNR)

• Consensus EPS forecast: $1.78
• Last Years EPS:$0.85

Headquartered in Norway, Equinor (NYSE:EQNR) is the leading integrated energy company globally, with operations across 30 countries. It’s the second-largest natural gas supplier in Europe and the leading seller of crude oil in the region.

Elevated prices have been boon for Equinor currently, with its revenue growth at over 128% on a year-over-year basis. Moreover, its EBITDA has grown over 249% in the past 12 months, with its profitability metrics soaring due to higher prices. Moreover, with the EU looking to replace gas from Russia, Equinor is set to benefit immensely from the massive growth in demand. Therefore, EQNR stock remains one of the best stocks to watch over the long term, which is reflected in its strong consensus estimates for the third quarter.

KLA Corporation (KLAC)

• Consensus EPS forecast: $6.23
• Last Years EPS: $4.64

KLA Corporation (NASDAQ:KLAC) is a market leader in the semiconductor sector’s process diagnostic and control (PDC) segment. It owns a 50% share in the PDC market with more than 48,000 tools, establishing its leadership position in the space.

Recent results illustrate the importance of its tools to its growing list of clients. Despite multiple headwinds, it saw healthy growth in revenues and earnings in its second quarter. It expects another spectacular showing in its upcoming quarterly results,  demonstrating sustainable performance and highlighting the critical nature of its services in being an enabler of digital transformation. Moreover, it plans to grow sales at an average of 9% to 11% annually through 2026 and plans to return roughly 85% of its free cash flows to shareholders. Thus, it is one of the top stocks to watch.

Suncor Energy (SU)

• Consensus EPS forecast: $1.40
• Last Years EPS: $0.56

Suncor Energy (NYSE:SU) is a high-yielding Canadian oil extraction company that produces synthetic crude oil from Canada’s oil-sands fields. It offers a superb 4.6% dividend yield and is remarkably undervalued compared to its peers. Moreover, it boasts an industry-leading margin profile with over an 18% levered free cash flow margin.

Suncor beat sales targets by a whopping $2.4 billion in the second quarter, with analysts and Suncor increasing earnings guidance for the year by more than 200%. The company benefits from the resurgence in fuel prices, which should keep most of its gains beyond 2022. Perhaps it is a no-brainer investment in its niche because it trades at just 1.1 times forward sales, roughly 39% lower than its 5-year average. I believe that makes SU one of the stocks to watch for a stellar earnings smasher.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.