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What's in Store for Schlumberger (SLB) in Q4 Earnings?
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Major oilfield services player Schlumberger Limited (SLB - Free Report) is set to report fourth-quarter 2016 results on Jan 20.
Last quarter, Schlumberger posted a positive earnings surprise of 13.64%. Moreover, the company posted an average positive earnings surprise of 4.73% in the last four quarters. Let’s see how things are shaping up for this announcement.
Factors to Consider this Quarter
Although oil prices remained low in the first two months of the fourth quarter, the commodity advanced after OPEC decided to cut production. On Nov 30, the cartel reached a historic accord to curb output in keeping with the need to recover from the weak pricing scenario. Notably, this is the first time since 2008 that OPEC signed a deal to cut oil production.
Thereafter, non-OPEC players also jumped on the bandwagon to limit crude output. After the historic deal, crude started moving north and even crossed the psychological $50 per barrel mark. In fact, throughout December the commodity was sold above the benchmark.
Overall, we can say that the last month of fourth quarter was surely favorable oil exploration and production (E&P) companies. These firms continued to gather on the oil patches as evidenced by from the improved rig count data issued by Baker Hughes Inc. . Definitely with more E&P activities there will be more contracts for oilfield services players like Schlumberger for efficiently setting up oil wells.
Shares of Schlumberger underperformed the Zacks categorized Oil & Gas-Field Services industry in the last three months. During the aforesaid period, the company gained 4.2% compared with 6.6% improvement for the broader industry. Also, the company saw the Zacks Consensus Estimate for fourth quarter being revised downward from 28 cents to 27 cents in the last 60 days.
Earnings Whispers
Our proven model does not conclusively show that Schlumberger will 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) to be able to beat estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 27 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Schlumberger carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
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.
SM Energy Company (SM - Free Report) has an Earnings ESP of +11.91% and a Zacks Rank #3. The company is expected to release earnings results on Feb 28.
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What's in Store for Schlumberger (SLB) in Q4 Earnings?
Major oilfield services player Schlumberger Limited (SLB - Free Report) is set to report fourth-quarter 2016 results on Jan 20.
Last quarter, Schlumberger posted a positive earnings surprise of 13.64%. Moreover, the company posted an average positive earnings surprise of 4.73% in the last four quarters. Let’s see how things are shaping up for this announcement.
Factors to Consider this Quarter
Although oil prices remained low in the first two months of the fourth quarter, the commodity advanced after OPEC decided to cut production. On Nov 30, the cartel reached a historic accord to curb output in keeping with the need to recover from the weak pricing scenario. Notably, this is the first time since 2008 that OPEC signed a deal to cut oil production.
Thereafter, non-OPEC players also jumped on the bandwagon to limit crude output. After the historic deal, crude started moving north and even crossed the psychological $50 per barrel mark. In fact, throughout December the commodity was sold above the benchmark.
Overall, we can say that the last month of fourth quarter was surely favorable oil exploration and production (E&P) companies. These firms continued to gather on the oil patches as evidenced by from the improved rig count data issued by Baker Hughes Inc. . Definitely with more E&P activities there will be more contracts for oilfield services players like Schlumberger for efficiently setting up oil wells.
Shares of Schlumberger underperformed the Zacks categorized Oil & Gas-Field Services industry in the last three months. During the aforesaid period, the company gained 4.2% compared with 6.6% improvement for the broader industry. Also, the company saw the Zacks Consensus Estimate for fourth quarter being revised downward from 28 cents to 27 cents in the last 60 days.
Earnings Whispers
Our proven model does not conclusively show that Schlumberger will 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) to be able to beat estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 27 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Schlumberger carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
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
Hess Corporation (HES - Free Report) , which is expected to release earnings results on Jan 25, has an Earnings ESP of +2.78% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy Company (SM - Free Report) has an Earnings ESP of +11.91% and a Zacks Rank #3. The company is expected to release earnings results on Feb 28.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>