Anadarko Petroleum Corp. (APC - Analyst Report) is slated to release its second quarter 2013 earnings results after the market bell on Jul 29. Last quarter, the company reported a positive earnings surprise of 17.39%. Let’s see how things are shaping up for the oil and gas operator for this announcement.
Factors to Consider This Quarter
Anadarko Petroleum’s aggressive exploration programs at the deepwater Gulf of Mexico will continue to drive growth. In addition, commencement of oil production at the El Merck play in Algeria will add to the company’s revenue stream.
The company’s Marcellus and Eagleford domestic plays are also expected to record favorable production, accelerating returns. However, fluctuations in commodity prices might affect Anadarko Petroleum’s top-line in the second quarter.
Our proven model does not conclusively show that Anadarko Petroleum is likely to beat earnings this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Negative Zacks ESP: The Most Accurate estimate stands at 90 cents while the Zacks Consensus Estimate is higher at 91 cents. This comes to a difference of -1.10%.
Zacks Rank #3 (Hold): Anadarko Petroleum has a Zacks Rank #3 (Hold). This combined with an ESP of -1.10% makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Memorial Production Partners L.P. (MEMP - Snapshot Report), Earnings ESP of +2.33% and a Zacks Rank #1 (Strong Buy).
EPL Oil & Gas Inc. , Earnings ESP of +4.17% and a Zacks Rank #2 (Buy).
Carrizo Oil & Gas Inc. (CRZO - Snapshot Report), Earnings ESP of +5.56% and a Zacks Rank #2 (Buy).