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Occidental Petroleum (OXY) Q3 Earnings: What's in Store?
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Occidental Petroleum Corporation (OXY - Free Report) will release third-quarter 2016 financial results before the market opens on Nov 1. Last quarter, this independent oil and gas operator reported a positive earnings surprise of 10.00%. Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Continued volatility in crude oil prices is expected to have a negative impact on Occidental’s top line. In fact, we are apprehensive that the commodity price environment will remain choppy throughout the rest of this year and the next, thereby hurting Occidental’s financials.
Capital expenditure in the second half is anticipated to increase slightly over the first-half levels in lieu of certain deferred project-related expenditures in Chemicals and Midstream. However, the company plans to recycle some of the capital efficiency savings achieved so far in exploring potential drilling opportunities.
Moreover, Occidental has pursued cost reduction efforts through the third quarter in an attempt to counter the difficult commodity price environment and cushion its margins. However, despite a decrease in the projected total capital expenditure for 2016, third-quarter production would not decline, instead ranging between 600,000 and 605,000 BOE per day. Preserving liquidity without cutting down production is a commendable step by the company.
Our proven model does not conclusively show thatOccidental Petroleumis likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: The Most Accurate estimate stands at a loss of 14 cents, while the Zacks Consensus Estimate is pegged at a loss of 10 cents, resulting in an Earnings ESP of -40.00%.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Occidental carries a Zacks Rank #3. Though the Zacks Rank #3 increases the possibility of a beat, its negative ESP makes a surprise prediction difficult.
We caution against Sell-rated stocks (#4 or #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few players in the oil and gas sector that have the right combination of elements to post an earnings beat this quarter.
EQT GP Holdings, LP has an Earnings ESP of +5.26% and a Zacks Rank #2. It is scheduled to report third-quarter earnings on Oct 27.
CONE Midstream Partners LP has an Earnings ESP of +2.70% and a Zacks Rank #1. It is slated to report third-quarter earnings on Nov 4.
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Occidental Petroleum (OXY) Q3 Earnings: What's in Store?
Occidental Petroleum Corporation (OXY - Free Report) will release third-quarter 2016 financial results before the market opens on Nov 1. Last quarter, this independent oil and gas operator reported a positive earnings surprise of 10.00%. Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Continued volatility in crude oil prices is expected to have a negative impact on Occidental’s top line. In fact, we are apprehensive that the commodity price environment will remain choppy throughout the rest of this year and the next, thereby hurting Occidental’s financials.
Capital expenditure in the second half is anticipated to increase slightly over the first-half levels in lieu of certain deferred project-related expenditures in Chemicals and Midstream. However, the company plans to recycle some of the capital efficiency savings achieved so far in exploring potential drilling opportunities.
Moreover, Occidental has pursued cost reduction efforts through the third quarter in an attempt to counter the difficult commodity price environment and cushion its margins. However, despite a decrease in the projected total capital expenditure for 2016, third-quarter production would not decline, instead ranging between 600,000 and 605,000 BOE per day. Preserving liquidity without cutting down production is a commendable step by the company.
OCCIDENTAL PET Price and EPS Surprise
OCCIDENTAL PET Price and EPS Surprise | OCCIDENTAL PET Quote
Earnings Whispers
Our proven model does not conclusively show thatOccidental Petroleumis likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: The Most Accurate estimate stands at a loss of 14 cents, while the Zacks Consensus Estimate is pegged at a loss of 10 cents, resulting in an Earnings ESP of -40.00%.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Occidental carries a Zacks Rank #3. Though the Zacks Rank #3 increases the possibility of a beat, its negative ESP makes a surprise prediction difficult.
We caution against Sell-rated stocks (#4 or #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few players in the oil and gas sector that have the right combination of elements to post an earnings beat this quarter.
EQT GP Holdings, LP has an Earnings ESP of +5.26% and a Zacks Rank #2. It is scheduled to report third-quarter earnings on Oct 27.
Archrock Partners, L.P. is expected to report third-quarter 2016 earnings on Nov 1. It has an Earnings ESP of +8.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
CONE Midstream Partners LP has an Earnings ESP of +2.70% and a Zacks Rank #1. It is slated to report third-quarter earnings on Nov 4.
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>>