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Oil Stocks to Watch for Q4 Earnings on Feb 3: PSX, ATW
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We are almost at the middle of the Q4 earnings season, with more S&P 500 members likely to release results tomorrow.
Q4 Earnings Trends
We now have Q4 results from 219 S&P 500 members or 58.8% of the index’s total market capitalization. According to the latest Earning Trends, total earnings for these companies are up 5.4% on 3.5% higher revenues, both on a year-over-year basis. While 64.8% of the companies posted positive earnings surprises, 53.4% beat revenue estimates.
Energy Sector Turns Positive
The earnings picture for the energy sector looks promising. This is because the beleaguered sector has returned to positive growth for the first time in more than two years. ExxonMobil Corporation’s (XOM - Free Report) – the world’s largest publicly traded oil company – recorded 33% higher earnings in Q4. This is the primary factor for the sector’s earnings growth turning positive despite Chevron Corporation’s (CVX - Free Report) complicated results.
Interestingly, total earnings for this sector are up 12.2% on 2.8% higher revenues. We note that 58.3% of the energy companies have beaten earnings estimates, while 75% of the companies have outperformed on the top-line front.
Oil Companies in Focus
Although oil prices remained low in the first two months of Q4, 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, the last month of Q4 was favorable oil Exploration and Production (E&P) companies. The improved rig count data issued by Baker Hughes Inc. (BHI) clearly indicates that more and more of these firms continue to gather to the oil patches. No doubt, increase in E&P activities will result in more contracts for drilling players for getting crude out of wells as well as completion works.
The last month of Q4 was also conducive for midstream energy companies as there was higher demand for storage and transportation of newly produced oil. Overall, the oversupplied commodity market created steady demand for storage activities throughout the quarter.
However, December was unfavorable for the refining businesses as input cost increased with improved crude prices.
Stocks to Watch for Earnings on Feb 3
Let’s see how these two companies are likely to fare when they come up with Q4 numbers on Friday, Feb 3.
Based in Houston, TX Phillips 66 (PSX - Free Report) is a diversified energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. The company will report before the opening bell.
In Q3, Phillips posted better-than-expected earnings. However, we do not expect the company to beat expectations in Q4. Per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat on earnings. Though Phillips’ Zacks Rank #3 increases the predictive power of ESP, its Earnings ESP of 0.00% makes surprise prediction difficult.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Conversely, 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.
Atwood Oceanics Inc. – headquartered in Houston, TX – is an offshore drilling contractor that engages in operations like drilling and completion of exploratory and developmental oil and gas wells. The company is scheduled to report quarterly results after the closing bell.
In the last quarter, Atwood reported better-than-expected earnings. However, we do not expect the company to beat expectations this time around. Though the company’s Zacks Rank #3 (Hold) increases the predictive power of ESP, its Earnings ESP of -33.33% makes surprise prediction difficult.
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buy"" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 ""Strong Sells"" and other private research. See the stocks free >>
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Oil Stocks to Watch for Q4 Earnings on Feb 3: PSX, ATW
We are almost at the middle of the Q4 earnings season, with more S&P 500 members likely to release results tomorrow.
Q4 Earnings Trends
We now have Q4 results from 219 S&P 500 members or 58.8% of the index’s total market capitalization. According to the latest Earning Trends, total earnings for these companies are up 5.4% on 3.5% higher revenues, both on a year-over-year basis. While 64.8% of the companies posted positive earnings surprises, 53.4% beat revenue estimates.
Energy Sector Turns Positive
The earnings picture for the energy sector looks promising. This is because the beleaguered sector has returned to positive growth for the first time in more than two years. ExxonMobil Corporation’s (XOM - Free Report) – the world’s largest publicly traded oil company – recorded 33% higher earnings in Q4. This is the primary factor for the sector’s earnings growth turning positive despite Chevron Corporation’s (CVX - Free Report) complicated results.
Interestingly, total earnings for this sector are up 12.2% on 2.8% higher revenues. We note that 58.3% of the energy companies have beaten earnings estimates, while 75% of the companies have outperformed on the top-line front.
Oil Companies in Focus
Although oil prices remained low in the first two months of Q4, 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, the last month of Q4 was favorable oil Exploration and Production (E&P) companies. The improved rig count data issued by Baker Hughes Inc. (BHI) clearly indicates that more and more of these firms continue to gather to the oil patches. No doubt, increase in E&P activities will result in more contracts for drilling players for getting crude out of wells as well as completion works.
The last month of Q4 was also conducive for midstream energy companies as there was higher demand for storage and transportation of newly produced oil. Overall, the oversupplied commodity market created steady demand for storage activities throughout the quarter.
However, December was unfavorable for the refining businesses as input cost increased with improved crude prices.
Stocks to Watch for Earnings on Feb 3
Let’s see how these two companies are likely to fare when they come up with Q4 numbers on Friday, Feb 3.
Based in Houston, TX Phillips 66 (PSX - Free Report) is a diversified energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. The company will report before the opening bell.
In Q3, Phillips posted better-than-expected earnings. However, we do not expect the company to beat expectations in Q4. Per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat on earnings. Though Phillips’ Zacks Rank #3 increases the predictive power of ESP, its Earnings ESP of 0.00% makes surprise prediction difficult.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Conversely, 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.
Phillips 66 Price and EPS Surprise
Phillips 66 Price and EPS Surprise | Phillips 66 Quote
Atwood Oceanics Inc. – headquartered in Houston, TX – is an offshore drilling contractor that engages in operations like drilling and completion of exploratory and developmental oil and gas wells. The company is scheduled to report quarterly results after the closing bell.
In the last quarter, Atwood reported better-than-expected earnings. However, we do not expect the company to beat expectations this time around. Though the company’s Zacks Rank #3 (Hold) increases the predictive power of ESP, its Earnings ESP of -33.33% makes surprise prediction difficult.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Atwood Oceanics, Inc. Price and EPS Surprise
Atwood Oceanics, Inc. Price and EPS Surprise | Atwood Oceanics, Inc. Quote
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buy"" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 ""Strong Sells"" and other private research. See the stocks free >>