We are at the tail end of the Q1 earnings season, with 85.7% of the S&P 500 members having reported results as of May 5.
To date, we have Q1 results from 412 S&P 500 members. According to the latest Earnings Preview report, total earnings for these companies have grown 14.2% on 7.3% higher revenues, both on a year-over-year basis. So far, 73.3% companies delivered positive earnings surprises and 67.7% beat revenue estimates.
The Energy sector has made a good start this earnings cycle. For the bulk sector components (90.9% to be precise) on the S&P 500 Index that have reported Q1 results, total revenue surged 33.3%. Most importantly, 70.0% of the energy companies have surpassed earnings estimates while 63.3% of the firms beat expectations on the top-line front.
Let's delve deeper to find out what influenced the sector’s performance this quarter.
Despite the biggest oil deal in a decade and a pro-fossil fuel administration in the White House, crude prices declined almost 6% in Q1. OPEC's historic accord to cut output and restore the demand-supply balance stabilized the market to a large extent. However, U.S. shale players tried to make the most of the improving oil price scenario by increasing production. With the recent surge in U.S. shale production putting pressure on the market, oil ended the first quarter at $50.60 per barrel, down 5.8% from the 2016-end level.
Natural gas fared even worse. Price of the commodity plunged 14% in the January–March quarter, thanks to one of the mildest winters on record. A warmer winter translated into lesser requirement for the heating fuel, in turn, upending demand forecasts.
Despite the sequential fall, both oil and natural gas prices improved from the corresponding period of 2016. In the year-ago period, crude slumped to a 12-year low, while natural gas futures dropped to its worst level in almost 17 years.
Following eight back-to-back quarters of earnings declines, the sector turned around in 4Q16 and clocked its first positive earnings growth after two years. With estimate revisions going up following OPEC’s Algeria grandstand, the Oil/Energy sector’s earnings were expected to improve handsomely from the 4Q15 levels.
True to predictions, the sector came out swinging. For the sector components on the S&P 500 Index, total Q4 earnings were up 17.1% on 2.0% higher revenues.
The picture looks rather encouraging for the ongoing Q1 earnings season as well. This is not surprising as both oil and gas fell to multi-year lows in the year-ago period. In fact, the Energy sector is set to turn around from a modest loss in the year-earlier period to improving positive earnings this quarter.
Stocks to Watch for Earnings on May 8
Let’s see what’s in store for these four energy companies that are expected to report Q1 results on May 10.
Spectra Energy Partners L.P. is expected to report financial results, after the market closes.
Last quarter, the partnership had a positive earnings surprise of 1.25%. In the last four quarters, the partnership’s average earnings surprise was a positive 2.63%.
Our model does not indicate that Spectra Energy Partners is likely to beat on earnings this time around. 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 beat on earnings.
Spectra Energy Partners currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, its Earnings ESP of -1.22% complicates our surprise prediction. 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.
DCP Midstream Partners L.P will also report its quarterly results after the market closes.
The partnership’s earnings surprise history is a mixed bag as it outpaced estimates in two of the last four quarters.
Our proven model does not conclusively show that the partnership is likely to beat on earnings in the to-be-reported quarter. This is because it has an Earnings ESP of -22.22% and Zacks Rank #5.
Wildhorse Resource Development Corporation is anticipated to report earnings after the closing bell.
The company had a negative earnings surprise of 166.67% in the last quarter. Our proven model does not show that the company is likely to beat on earnings in the to-be-reported quarter. This is because it has an Earnings ESP of 0.00% and a Zacks Rank #3.
Enbridge Energy, L.P. is slated to report earnings after the closing bell.
The company had a positive earnings surprise of 7.69% last quarter. Moreover, it surpassed the Zacks Consensus Estimate in three of the last four quarters with an average earnings surprise of positive 19.71%.
Our proven model does not show that the partnership is likely to beat on earnings in the to-be-reported quarter. This is because it has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
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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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Oil Stocks to Watch for Earnings on May 10: SEP, DCP & More
We are at the tail end of the Q1 earnings season, with 85.7% of the S&P 500 members having reported results as of May 5.
To date, we have Q1 results from 412 S&P 500 members. According to the latest Earnings Preview report, total earnings for these companies have grown 14.2% on 7.3% higher revenues, both on a year-over-year basis. So far, 73.3% companies delivered positive earnings surprises and 67.7% beat revenue estimates.
The Energy sector has made a good start this earnings cycle. For the bulk sector components (90.9% to be precise) on the S&P 500 Index that have reported Q1 results, total revenue surged 33.3%. Most importantly, 70.0% of the energy companies have surpassed earnings estimates while 63.3% of the firms beat expectations on the top-line front.
Let's delve deeper to find out what influenced the sector’s performance this quarter.
Despite the biggest oil deal in a decade and a pro-fossil fuel administration in the White House, crude prices declined almost 6% in Q1. OPEC's historic accord to cut output and restore the demand-supply balance stabilized the market to a large extent. However, U.S. shale players tried to make the most of the improving oil price scenario by increasing production. With the recent surge in U.S. shale production putting pressure on the market, oil ended the first quarter at $50.60 per barrel, down 5.8% from the 2016-end level.
Natural gas fared even worse. Price of the commodity plunged 14% in the January–March quarter, thanks to one of the mildest winters on record. A warmer winter translated into lesser requirement for the heating fuel, in turn, upending demand forecasts.
Despite the sequential fall, both oil and natural gas prices improved from the corresponding period of 2016. In the year-ago period, crude slumped to a 12-year low, while natural gas futures dropped to its worst level in almost 17 years.
Following eight back-to-back quarters of earnings declines, the sector turned around in 4Q16 and clocked its first positive earnings growth after two years. With estimate revisions going up following OPEC’s Algeria grandstand, the Oil/Energy sector’s earnings were expected to improve handsomely from the 4Q15 levels.
True to predictions, the sector came out swinging. For the sector components on the S&P 500 Index, total Q4 earnings were up 17.1% on 2.0% higher revenues.
The picture looks rather encouraging for the ongoing Q1 earnings season as well. This is not surprising as both oil and gas fell to multi-year lows in the year-ago period. In fact, the Energy sector is set to turn around from a modest loss in the year-earlier period to improving positive earnings this quarter.
Stocks to Watch for Earnings on May 8
Let’s see what’s in store for these four energy companies that are expected to report Q1 results on May 10.
Spectra Energy Partners L.P. is expected to report financial results, after the market closes.
Last quarter, the partnership had a positive earnings surprise of 1.25%. In the last four quarters, the partnership’s average earnings surprise was a positive 2.63%.
Our model does not indicate that Spectra Energy Partners is likely to beat on earnings this time around. 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 beat on earnings.
Spectra Energy Partners currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, its Earnings ESP of -1.22% complicates our surprise prediction. 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.
Spectra Energy Partners, LP Price and EPS Surprise
Spectra Energy Partners, LP Price and EPS Surprise | Spectra Energy Partners, LP Quote
DCP Midstream Partners L.P will also report its quarterly results after the market closes.
The partnership’s earnings surprise history is a mixed bag as it outpaced estimates in two of the last four quarters.
Our proven model does not conclusively show that the partnership is likely to beat on earnings in the to-be-reported quarter. This is because it has an Earnings ESP of -22.22% and Zacks Rank #5.
DCP Midstream Partners, LP Price and EPS Surprise
DCP Midstream Partners, LP Price and EPS Surprise | DCP Midstream Partners, LP Quote
Wildhorse Resource Development Corporation is anticipated to report earnings after the closing bell.
The company had a negative earnings surprise of 166.67% in the last quarter. Our proven model does not show that the company is likely to beat on earnings in the to-be-reported quarter. This is because it has an Earnings ESP of 0.00% and a Zacks Rank #3.
Wildhorse Resource Development Corporation Price and EPS Surprise
Wildhorse Resource Development Corporation Price and EPS Surprise | Wildhorse Resource Development Corporation Quote
Enbridge Energy, L.P. is slated to report earnings after the closing bell.
The company had a positive earnings surprise of 7.69% last quarter. Moreover, it surpassed the Zacks Consensus Estimate in three of the last four quarters with an average earnings surprise of positive 19.71%.
Our proven model does not show that the partnership is likely to beat on earnings in the to-be-reported quarter. This is because it has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Enbridge Energy, L.P. Price and EPS Surprise
Enbridge Energy, L.P. Price and EPS Surprise | Enbridge Energy, L.P. Quote
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 >>