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What's in Store for Phillips 66 (PSX) this Earnings Season?
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Leading refining player Phillips 66 (PSX - Free Report) is expected to report first-quarter 2017 earnings on Apr 28, before the market opens.
The company’s earnings surprise history is disappointing. Phillips66, which was spun off from ConocoPhillips (COP - Free Report) on May 1, 2012, missed the Zacks Consensus Estimate in two of the prior four quarters with an average negative earnings surprise of 14.95%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence Earnings
Phillips 66 with 13 refineries, most of which are located in the U.S, is among the largest refiners in the world with total processing capacity of 2.2 million barrels per day.
It is to be noted that the company’s prospects are negatively correlated with oil prices. This is because refiners buy raw crude to produce refined products like gasoline. During the first quarter, the pricing scenario of crude was better than year-earlier quarter, courtesy of the historical OPEC agreement. Though this was favorable for the Energy sector as a whole, refiners tend to be losers as improvement in crude price translates to higher input cost for these companies. This is likely to hurt the company’s first-quarter profitability.
Q1 Stock Price Performance
Pricing chart for the first three months of this year reveals that Phillips 66’s shares outperformed the Zacks categorized Oil & Gas-U.S Integrated industry. During the aforesaid period, the company’s shares lost 8.3% as against 9.4% decrease for the broader industry.
Earnings Whispers
Our proven model does not conclusively show that Phillips 66 is 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. 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 for the company stand at 3 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Phillips 66 carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, an Earnings ESP of 0.00% makes surprise prediction difficult.
Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Though an earnings beat looks uncertain for Phillips 66, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Cimarex Energy Co. has an Earnings ESP of +2.38% and a Zacks Rank #3. The firm is expected to release earnings on May 8.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>
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What's in Store for Phillips 66 (PSX) this Earnings Season?
Leading refining player Phillips 66 (PSX - Free Report) is expected to report first-quarter 2017 earnings on Apr 28, before the market opens.
The company’s earnings surprise history is disappointing. Phillips66, which was spun off from ConocoPhillips (COP - Free Report) on May 1, 2012, missed the Zacks Consensus Estimate in two of the prior four quarters with an average negative earnings surprise of 14.95%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence Earnings
Phillips 66 with 13 refineries, most of which are located in the U.S, is among the largest refiners in the world with total processing capacity of 2.2 million barrels per day.
It is to be noted that the company’s prospects are negatively correlated with oil prices. This is because refiners buy raw crude to produce refined products like gasoline. During the first quarter, the pricing scenario of crude was better than year-earlier quarter, courtesy of the historical OPEC agreement. Though this was favorable for the Energy sector as a whole, refiners tend to be losers as improvement in crude price translates to higher input cost for these companies. This is likely to hurt the company’s first-quarter profitability.
Q1 Stock Price Performance
Pricing chart for the first three months of this year reveals that Phillips 66’s shares outperformed the Zacks categorized Oil & Gas-U.S Integrated industry. During the aforesaid period, the company’s shares lost 8.3% as against 9.4% decrease for the broader industry.
Earnings Whispers
Our proven model does not conclusively show that Phillips 66 is 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. 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 for the company stand at 3 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Phillips 66 carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, an Earnings ESP of 0.00% makes surprise prediction difficult.
Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Though an earnings beat looks uncertain for Phillips 66, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Chesapeake Energy Corp. (CHK - Free Report) has an Earnings ESP of +5.00% and a Zacks Rank #3. The company is expected to release earnings on May 4. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cimarex Energy Co. has an Earnings ESP of +2.38% and a Zacks Rank #3. The firm is expected to release earnings on May 8.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>