We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
EOG Resources (EOG) Q4 Earnings: Is a Surprise in Store?
Read MoreHide Full Article
Upstream energy player EOG Resources Inc. (EOG - Free Report) is expected to release fourth-quarter 2016 financial results on Feb 28.
Last quarter, the company posted a negative earnings surprise of 29.03%. However, over the prior four quarters, the company’s average earnings surprise was a positive 4.05%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Past 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 was the first time since 2008 that OPEC signed a deal to cut oil production.
Soon after, non-OPEC players also jumped on the bandwagon to limit crude output. Following 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.
Natural gas pricing scenario was also favorable during the entire fourth quarter compared with the year earlier comparable quarter.
Overall, the last month of the fourth quarter was favorable for oil exploration and production (E&P) companies. The improved rig count data issued by Baker Hughes Inc. clearly indicates that more and more of these firms are gathering to the oil patches.
Amid improved commodity prices, the company’s year-over-year improved production guidance for the October to December quarter of 2016 was impressive. For fourth-quarter 2016, the company projected production in a range of 562.7 to 591.8 thousand barrels of oil equivalent per day (MBOE/D). The output could be higher than 569.5 MBOE/D during fourth quarter 2015.
All those improvements are reflected in the company’s pricing behavior during the October to December quarter of 2016. Over the aforesaid period, EOG Resources outperformed the Zacks categorized Oil & Gas-U.S Exploration & Production industry. Through the aforesaid period, shares of the company gained 5.2% compared with only 0.6% improvement for the broader industry.
Earnings Whispers
Our proven model does not conclusively show that EOG Resources 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. That is not the case here, as you will see below.
Zacks ESP: EOG Resources has an Earnings ESP of -6.67%. This is because the Most Accurate estimate stands at a loss of 16 cents while the Zacks Consensus Estimate is pegged at a loss of 15 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: EOG Resources carries a Zacks Rank #3, which increases the predictive power of ESP. However, a -6.67% ESP complicates our surprise prediction.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the energy space that have the right combination of elements to post an earnings beat this quarter:
ONEOK Partners, L.P. has an Earnings ESP of +3.08% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
EOG Resources (EOG) Q4 Earnings: Is a Surprise in Store?
Upstream energy player EOG Resources Inc. (EOG - Free Report) is expected to release fourth-quarter 2016 financial results on Feb 28.
Last quarter, the company posted a negative earnings surprise of 29.03%. However, over the prior four quarters, the company’s average earnings surprise was a positive 4.05%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Past 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 was the first time since 2008 that OPEC signed a deal to cut oil production.
Soon after, non-OPEC players also jumped on the bandwagon to limit crude output. Following 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.
Natural gas pricing scenario was also favorable during the entire fourth quarter compared with the year earlier comparable quarter.
Overall, the last month of the fourth quarter was favorable for oil exploration and production (E&P) companies. The improved rig count data issued by Baker Hughes Inc. clearly indicates that more and more of these firms are gathering to the oil patches.
Amid improved commodity prices, the company’s year-over-year improved production guidance for the October to December quarter of 2016 was impressive. For fourth-quarter 2016, the company projected production in a range of 562.7 to 591.8 thousand barrels of oil equivalent per day (MBOE/D). The output could be higher than 569.5 MBOE/D during fourth quarter 2015.
All those improvements are reflected in the company’s pricing behavior during the October to December quarter of 2016. Over the aforesaid period, EOG Resources outperformed the Zacks categorized Oil & Gas-U.S Exploration & Production industry. Through the aforesaid period, shares of the company gained 5.2% compared with only 0.6% improvement for the broader industry.
Earnings Whispers
Our proven model does not conclusively show that EOG Resources 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. That is not the case here, as you will see below.
Zacks ESP: EOG Resources has an Earnings ESP of -6.67%. This is because the Most Accurate estimate stands at a loss of 16 cents while the Zacks Consensus Estimate is pegged at a loss of 15 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: EOG Resources carries a Zacks Rank #3, which increases the predictive power of ESP. However, a -6.67% ESP complicates our surprise prediction.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the energy space that have the right combination of elements to post an earnings beat this quarter:
Kosmos Energy Ltd. (KOS - Free Report) has an Earnings ESP of +133.33% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
ONEOK Partners, L.P. has an Earnings ESP of +3.08% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>