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Major oilfield services provider Halliburton Co. (HAL - Analyst Report) is set to release its third quarter results before the opening bell on Monday, Oct 21.

In the preceding three-month period, Halliburton delivered a positive 1.39% earnings surprise – the fifth outperformance in the last 6 quarters – helped by robust performance from its international business. Let’s see how things are shaping up prior to this announcement.

Factors to Consider This Quarter

Halliburton’s international operations are showing signs of gradual improvement, with growth opportunities aplenty in Middle East, Russia and Asia.

However, this is more than negated by the sluggishness in Halliburton’s core U.S. segment.

In particular, the North American land rig count remained flat over the third quarter, as growth in highly-productive horizontal drilling has led to a natural gas supply overhang and relatively weak natural gas prices in the U.S. market. This has been only partially offset by the continued growth of oil- and liquids-rich reservoirs.

A slowdown in North American onshore activity levels impairs Halliburton’s business, as the company is heavily leveraged to the region through its market-share-leading pressure-pumping business.

Earnings Whispers?

Our proven model does not conclusively show that Halliburton is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen.Unfortunately this is not the case here as elaborated below.

Negative Zacks ESP: This is because the Most Accurate estimate stands at 82 cents, while the Zacks Consensus is higher at 83 cents. This results in a difference of -1.21%.

Zacks Rank #3 (Hold): Halliburton’s Zacks Rank #3 (Hold), however, increases the predictive power of ESP. That said, we also need to have a positive ESP to be confident of an earnings surprise call.

We caution against stocks with Zacks Rank #4 and 5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

While an earnings beat looks unlikely for Halliburton, here are some energy firms you may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter:

Matador Resources Co. (MTDR - Snapshot Report), with Earnings ESP of +34.48% and a Zacks Rank #1 (Strong Buy).

Whiting Petroleum Corp. (WLL - Snapshot Report), with Earnings ESP of +7.00% and a Zacks Rank #2 (Buy).

Swift Energy Co. (SFY - Snapshot Report), with Earnings ESP of +68.75% and a Zacks Rank #2 (Buy).

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