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BP Plc (BP) Q1 Earnings: Is Disappointment in the Cards?
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Leading integrated energy company BP plc (BP - Free Report) is expected to report first-quarter 2017 earnings around May 2, before the opening bell.
In the last reported quarter, the company posted a negative earnings surprise of 18.75%. However, over the last four quarters, the company had an average positive surprise of 42.86%.
Let’s see how things are shaping up for this announcement.
Factors to Consider This Past Quarter
The 2010 oil spill incident in the BP-operated Macondo Prospect continues to affect the company. Although BP has cleared the huge litigation expenses related to the spill, it had to divest some of its best operating properties.
We are also concerned about BP’s huge debt load. In fact, debt-to-equity ratio for BP is 53.4%, which is much higher than the Zacks categorized Oil & Gas-International Integrated industry’s 37.2%.
Moreover, the first three months of this year was not favorable for BP’s refining business. This is because improvement in the oil pricing scenario resulted in an increase in the input cost for refiners, making the refining business less profitable.
Stock Price Performance in Q1
BP’s pricing chart for the January–March quarter of this year reveals that the company’s shares underperformed the Zacks categorized Oil & Gas-International Integrated industry. During the aforesaid period, the company’s shares lost 7.7% as against 5.3% decrease for the broader industry.
What Our Model Indicates
Our proven model does not conclusively show that BP 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) 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 -5.26%. This is because the Most Accurate estimate stands at 36 cents while the Zacks Consensus Estimate is pegged at 38 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BP has a Zacks Rank #5 (Strong Sell).
We caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is seeing a negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the energy sector with the right combination of elements to post an earnings beat this quarter:
Cimarex Energy Co. has an Earnings ESP of +1.18% and a Zacks Rank #3. The firm is expected to release earnings on May 8.
Pioneer Natural Resources Company (PXD - Free Report) has a Zacks Rank #3 and an Earnings ESP of + 15.39%. The firm is expected to release earnings on May 3.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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BP Plc (BP) Q1 Earnings: Is Disappointment in the Cards?
Leading integrated energy company BP plc (BP - Free Report) is expected to report first-quarter 2017 earnings around May 2, before the opening bell.
In the last reported quarter, the company posted a negative earnings surprise of 18.75%. However, over the last four quarters, the company had an average positive surprise of 42.86%.
Let’s see how things are shaping up for this announcement.
Factors to Consider This Past Quarter
The 2010 oil spill incident in the BP-operated Macondo Prospect continues to affect the company. Although BP has cleared the huge litigation expenses related to the spill, it had to divest some of its best operating properties.
We are also concerned about BP’s huge debt load. In fact, debt-to-equity ratio for BP is 53.4%, which is much higher than the Zacks categorized Oil & Gas-International Integrated industry’s 37.2%.
Moreover, the first three months of this year was not favorable for BP’s refining business. This is because improvement in the oil pricing scenario resulted in an increase in the input cost for refiners, making the refining business less profitable.
Stock Price Performance in Q1
BP’s pricing chart for the January–March quarter of this year reveals that the company’s shares underperformed the Zacks categorized Oil & Gas-International Integrated industry. During the aforesaid period, the company’s shares lost 7.7% as against 5.3% decrease for the broader industry.
What Our Model Indicates
Our proven model does not conclusively show that BP 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) 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 -5.26%. This is because the Most Accurate estimate stands at 36 cents while the Zacks Consensus Estimate is pegged at 38 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BP has a Zacks Rank #5 (Strong Sell).
We caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is seeing a negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the energy sector with the right combination of elements to post an earnings beat this quarter:
Chesapeake Energy Corp. (CHK - Free Report) has an Earnings ESP of +5.26% 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 +1.18% and a Zacks Rank #3. The firm is expected to release earnings on May 8.
Pioneer Natural Resources Company (PXD - Free Report) has a Zacks Rank #3 and an Earnings ESP of + 15.39%. The firm is expected to release earnings on May 3.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>