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EQT Corp (EQT): A Beat in Store this Earnings Season?
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Integrated energy company, EQT Corporation (EQT - Free Report) is expected to report third-quarter 2016 earnings on Oct 27, before the market opens.
In the last quarter, the company incurred a loss of 35 cents per share, substantially narrower than the Zacks Consensus Estimate of a loss of 46 cents. The company had recorded earnings of 1 cent per share in the year-earlier quarter.
Let’s see how things are shaping up for this announcement.
Our proven model shows that EQT Corp. is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +6.82%. This is because the Most Accurate estimate stands at a loss of 41 cents, while the Zacks Consensus Estimate is pegged at a loss of 44 cents. This is very meaningful and a leading indicator of a likely positive earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: EQT Corp. carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Hold) or 3 have a significantly higher chance of beating earnings. The combination of Ensco’s favorable Zacks Rank and a positive ESP makes us confident about an earnings beat.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Factors Likely to Influence this Quarter
EQT Corp. acquired 62,500 acres in the core Marcellus development area of West Virginia from Statoil in Jul 2016. Most of this acreage complements EQT Corp.’s current holding in the area. We expect this to facilitate acceleration of production and thereby, boost revenues in the to-be-reported quarter as well as going forward.
EQT Corp.’s business primarily comprises production, gathering and transportation of natural gas. Natural gas is known for producing significantly less CO2 – a major pollutant – when burned to produce heat or power. With natural gas’ demand set to grow in the future, we expect the company to generate significant cash flows from its operations.
However, EQT Corp. lacks geographical diversification as its resources are concentrated in the Appalachian Basin. This increases the company’s risk exposure as any disruption in the region will affect its financials.
Due to its upstream operations, EQT Corp.’s profit is influenced by commodity price fluctuations. Low realizations affected the company’s revenues and earnings, which declined sharply from the prior-year quarter levels. With natural gas prices remaining weak, this trend is likely to continue.
Stocks to Consider
Here are some companies in the energy sector that investors may consider, as our model shows that they have the right combination of elements to beat estimates this quarter:
Spectra Energy Corp. (SE - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. The company is expected to release third-quarter earnings results on Nov 2.
Enterprise Products Partners LP (EPD - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #3. The company is expected to release third-quarter earnings results on Oct 27.
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EQT Corp (EQT): A Beat in Store this Earnings Season?
Integrated energy company, EQT Corporation (EQT - Free Report) is expected to report third-quarter 2016 earnings on Oct 27, before the market opens.
In the last quarter, the company incurred a loss of 35 cents per share, substantially narrower than the Zacks Consensus Estimate of a loss of 46 cents. The company had recorded earnings of 1 cent per share in the year-earlier quarter.
Let’s see how things are shaping up for this announcement.
EQT CORP Price and EPS Surprise
EQT CORP Price and EPS Surprise | EQT CORP Quote
Earnings Whispers
Our proven model shows that EQT Corp. is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +6.82%. This is because the Most Accurate estimate stands at a loss of 41 cents, while the Zacks Consensus Estimate is pegged at a loss of 44 cents. This is very meaningful and a leading indicator of a likely positive earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: EQT Corp. carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Hold) or 3 have a significantly higher chance of beating earnings. The combination of Ensco’s favorable Zacks Rank and a positive ESP makes us confident about an earnings beat.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Factors Likely to Influence this Quarter
EQT Corp. acquired 62,500 acres in the core Marcellus development area of West Virginia from Statoil in Jul 2016. Most of this acreage complements EQT Corp.’s current holding in the area. We expect this to facilitate acceleration of production and thereby, boost revenues in the to-be-reported quarter as well as going forward.
EQT Corp.’s business primarily comprises production, gathering and transportation of natural gas. Natural gas is known for producing significantly less CO2 – a major pollutant – when burned to produce heat or power. With natural gas’ demand set to grow in the future, we expect the company to generate significant cash flows from its operations.
However, EQT Corp. lacks geographical diversification as its resources are concentrated in the Appalachian Basin. This increases the company’s risk exposure as any disruption in the region will affect its financials.
Due to its upstream operations, EQT Corp.’s profit is influenced by commodity price fluctuations. Low realizations affected the company’s revenues and earnings, which declined sharply from the prior-year quarter levels. With natural gas prices remaining weak, this trend is likely to continue.
Stocks to Consider
Here are some companies in the energy sector that investors may consider, as our model shows that they have the right combination of elements to beat estimates this quarter:
Baker Hughes Inc. has an Earnings ESP of +4.65% and a Zacks Rank #2. The company is expected to release third-quarter earnings results on Oct 25. You can see the complete list of today’s Zacks #1 Rank stocks here.
Spectra Energy Corp. (SE - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. The company is expected to release third-quarter earnings results on Nov 2.
Enterprise Products Partners LP (EPD - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #3. The company is expected to release third-quarter earnings results on Oct 27.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>