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What's in Store for CONSOL Energy (CNX) in Q3 Earnings?

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CONSOL Energy (CNX - Free Report) , a coal and natural gas company, will release third-quarter 2016 financial results on Nov 1, before the opening bell. Last quarter, CONSOL Energy posted a negative earnings surprise of 23.53%. Let’s see how things are shaping up for this announcement.

Factors to Consider

During the third quarter, the company sold Miller Creek Complex and Fola Mining Complex to Southeastern Land LLC. This deal marks CONSOL Energy’s definitive exit from the central Appalachian coal and surface mining market. It is also a step toward eschewing the coal business from the mainstream E&P business.

CONSOL Energy’s focus on natural gas as well as its cost saving initiatives are projected to drive its performance in the to-be-reported quarter. The company is expected to benefit from improved completion techniques, reduced cycle times, and service cost reduction in the E&P operations.

Earnings Whispers

Our proven model does not conclusively show that CONSOL Energy is likely to beat estimates this quarter. This 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. However, that is not the case here, as you will see below.

Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

CONSOL ENERGY Price and EPS Surprise

 

CONSOL ENERGY Price and EPS Surprise | CONSOL ENERGY Quote

Zacks ESP: The Earnings ESP is -9.09%. This is because the Most Accurate estimate stands at a loss of 12 cents, wider than the Zacks Consensus Estimate of a loss of 11 cents.

Zacks Rank:  Although CONSOL’s Zacks Rank #3 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.

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

Stocks to Consider

CONSOL Energy does not have the right combination to come out with an earnings beat this season. Alliance Resource Partners LP (ARLP - Free Report) is the only stock related to the coal industry which has the right combination of elements to post an earnings beat this quarter.

The company scheduled to report third-quarter earnings on Oct 28. It is has an Earnings ESP of +5.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Investors could also consider the following oil & energy stocks, as our model they both have the right combination of elements to post an earnings beat this quarter:

Devon Energy Corporation (DVN - Free Report) is slated to report third-quarter earnings on Nov 1. It has an Earnings ESP of +20.00% and a Zacks Rank #2

EQT Corporation (EQT - Free Report) is slated to report third-quarter earnings on Oct 27. It has an Earnings ESP of +6.82% and a Zacks Rank #3.

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