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Can EOG Resources (EOG) Spring a Surprise in Q1 Earnings?
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Upstream energy player EOG Resources Inc. (EOG - Free Report) is expected to release first-quarter 2017 financial results on May 9.
Last quarter, the company posted a positive earnings surprise of 93.75%. In the last four quarters, the company’s average earnings surprise was a positive 22.94%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Past Quarter
Compared with the year-earlier quarter, the pricing scenario of oil was much better during the first quarter, courtesy of the historic OPEC production cut agreement. Natural gas prices too improved from the January–March quarter of 2016.
Undoubtedly, these factors were favorable for oil and gas exploration players like EOG Resources that were able to sell the commodities at higher prices. Moreover, the company is expected to report an increase in first-quarter production. This is due to the resurgence of shale players in the U.S oil and gas patches as evidenced by the increasing rig count data of Baker Hughes Inc. .
Moreover, financial health of EOG Resources is sound as reflected its impressive debt-to-capitalization ratio of 33.3%. In fact, the ratio is much lower than 51.89% for the Zacks categorized Oil & Gas-U.S Exploration & Productionindustry.
However, the company’s rising operating costs over the last two quarters raise concerns.
Share Price Performance
EOG Resources’ shares have outperformed the Zacks categorized Oil & Gas-U.S Exploration & Production industry during the first three months of this year. In the aforesaid period, the stock lost 3.5% as against 11.1% decrease 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 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a profit 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 0.00% Earnings 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:
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +100.00% and a Zacks Rank #3. The firm is expected to release earnings on May 8.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Can EOG Resources (EOG) Spring a Surprise in Q1 Earnings?
Upstream energy player EOG Resources Inc. (EOG - Free Report) is expected to release first-quarter 2017 financial results on May 9.
Last quarter, the company posted a positive earnings surprise of 93.75%. In the last four quarters, the company’s average earnings surprise was a positive 22.94%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Past Quarter
Compared with the year-earlier quarter, the pricing scenario of oil was much better during the first quarter, courtesy of the historic OPEC production cut agreement. Natural gas prices too improved from the January–March quarter of 2016.
Undoubtedly, these factors were favorable for oil and gas exploration players like EOG Resources that were able to sell the commodities at higher prices. Moreover, the company is expected to report an increase in first-quarter production. This is due to the resurgence of shale players in the U.S oil and gas patches as evidenced by the increasing rig count data of Baker Hughes Inc. .
Moreover, financial health of EOG Resources is sound as reflected its impressive debt-to-capitalization ratio of 33.3%. In fact, the ratio is much lower than 51.89% for the Zacks categorized Oil & Gas-U.S Exploration & Productionindustry.
However, the company’s rising operating costs over the last two quarters raise concerns.
Share Price Performance
EOG Resources’ shares have outperformed the Zacks categorized Oil & Gas-U.S Exploration & Production industry during the first three months of this year. In the aforesaid period, the stock lost 3.5% as against 11.1% decrease 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 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a profit 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 0.00% Earnings 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:
Global Partners LP (GLP - Free Report) has an Earnings ESP of +233.33% and a Zacks Rank #1. The partnership is expected to release earnings on May 9. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +100.00% and a Zacks Rank #3. The firm is expected to release earnings on May 8.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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