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What's in the Cards for Hess (HES) This Earnings Season?
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Hess Corporation (HES - Free Report) is expected to report fourth-quarter 2017 results on Feb 5.
Last quarter, the company delivered a positive earnings surprise of 17.05%. Moreover, Hess reported an average positive earnings surprise of 3.91% for the last four quarters.
Let’s see how things are shaping up prior to the announcement.
Which Way Are Estimates Treading?
Let’s take a look at the estimate revision trend for Hess to gain a clear picture of what analysts think about the company's fourth-quarter release.
The Zacks Consensus Estimate of a loss of 84 cents for the fourth quarter has seen three upward and three downward revisions in the last 30 days. This reflects year-over-year improvement of about 16.8% from the year-ago quarter.
Further, analysts polled by Zacks project revenues of $1,294 million for the fourth quarter, down 6.83% from the year-ago quarter.
Factors to Consider
The Zacks Consensus Estimate for average worldwide realized price of oil (including hedging) is $53 per barrel, up from $46.97 in the last quarter and $45.97 in the year-ago quarter.
Analysts polled by Zacks expect average worldwide realized natural gas price to rise 19.4% from the preceding quarter and 23.5% from the year-ago quarter to $4 per million cubic feet (mmcf).
Analysts polled by Zacks expect average worldwide realized natural gas liquids price to rise 14.5% from the preceding quarter and 34.3% from the year-ago quarter to $19.72 per barrel. The positivity in the oil and gas prices will benefit upstream players like Hess.
The Zacks Consensus Estimate for oil production per day is 162 thousand barrels of oil equivalent per day (Mboe/d), down from 176 Mboe/d in the preceding quarter and 186 Mboe/d in the year-ago quarter.
Analysts polled by Zacks expect natural gas production per day of 565 mcf, up from 552 mcf in the preceding quarter and 512 mcf from the year-ago quarter.
The Zacks Consensus Estimate for natural gas liquids production per day is 40.8 Mboe/d, down from 43 Mboe/d in the preceding quarter but up from 40 Mboe/d in the year-ago quarter.
Oil production is anticipated to decline, while gas production is expected to increase. With the increase in shale activities, we are likely to witness this trend in the upcoming days.
Price Performance in Q4
During the quarter, Hess has underperformed the industry. The stock has returned 1.2% compared with the industry’s 9.4% rally.
Earnings Whispers
Our proven model does not conclusively show that Hess is likely to beat estimates this quarter. This is because a stock needs to have 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 -7.28%. This is because the Most Accurate estimate is pegged at a loss of 90 cents, while the Zacks Consensus Estimate is of a loss of 84 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hess carries a Zacks Rank #3.
Please note that we caution investors 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.
Stocks to Consider
Here are some companies that you may consider as our model shows that these have the right combination of elements to beat earnings this quarter.
Headquartered in Irving, TX, Pioneer Natural Resources Company (PXD - Free Report) is an independent oil and gas exploration and production company. The company has an Earnings ESP of +4.07% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Houston, TX, Cabot Oil & Gas is an independent oil and gas exploration company with producing properties mainly in the continental United States. The company has an Earnings ESP of +4.98% and sports a Zacks Rank #1.
Cimarex Energy is an independent oil & gas exploration and production firm. The company has an Earnings ESP of +0.97% and has a Zacks Rank #3.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
What's in the Cards for Hess (HES) This Earnings Season?
Hess Corporation (HES - Free Report) is expected to report fourth-quarter 2017 results on Feb 5.
Last quarter, the company delivered a positive earnings surprise of 17.05%. Moreover, Hess reported an average positive earnings surprise of 3.91% for the last four quarters.
Let’s see how things are shaping up prior to the announcement.
Which Way Are Estimates Treading?
Let’s take a look at the estimate revision trend for Hess to gain a clear picture of what analysts think about the company's fourth-quarter release.
The Zacks Consensus Estimate of a loss of 84 cents for the fourth quarter has seen three upward and three downward revisions in the last 30 days. This reflects year-over-year improvement of about 16.8% from the year-ago quarter.
Further, analysts polled by Zacks project revenues of $1,294 million for the fourth quarter, down 6.83% from the year-ago quarter.
Factors to Consider
The Zacks Consensus Estimate for average worldwide realized price of oil (including hedging) is $53 per barrel, up from $46.97 in the last quarter and $45.97 in the year-ago quarter.
Analysts polled by Zacks expect average worldwide realized natural gas price to rise 19.4% from the preceding quarter and 23.5% from the year-ago quarter to $4 per million cubic feet (mmcf).
Analysts polled by Zacks expect average worldwide realized natural gas liquids price to rise 14.5% from the preceding quarter and 34.3% from the year-ago quarter to $19.72 per barrel. The positivity in the oil and gas prices will benefit upstream players like Hess.
The Zacks Consensus Estimate for oil production per day is 162 thousand barrels of oil equivalent per day (Mboe/d), down from 176 Mboe/d in the preceding quarter and 186 Mboe/d in the year-ago quarter.
Analysts polled by Zacks expect natural gas production per day of 565 mcf, up from 552 mcf in the preceding quarter and 512 mcf from the year-ago quarter.
The Zacks Consensus Estimate for natural gas liquids production per day is 40.8 Mboe/d, down from 43 Mboe/d in the preceding quarter but up from 40 Mboe/d in the year-ago quarter.
Oil production is anticipated to decline, while gas production is expected to increase. With the increase in shale activities, we are likely to witness this trend in the upcoming days.
Price Performance in Q4
During the quarter, Hess has underperformed the industry. The stock has returned 1.2% compared with the industry’s 9.4% rally.
Earnings Whispers
Our proven model does not conclusively show that Hess is likely to beat estimates this quarter. This is because a stock needs to have 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 -7.28%. This is because the Most Accurate estimate is pegged at a loss of 90 cents, while the Zacks Consensus Estimate is of a loss of 84 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hess carries a Zacks Rank #3.
Please note that we caution investors 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.
Stocks to Consider
Here are some companies that you may consider as our model shows that these have the right combination of elements to beat earnings this quarter.
Headquartered in Irving, TX, Pioneer Natural Resources Company (PXD - Free Report) is an independent oil and gas exploration and production company. The company has an Earnings ESP of +4.07% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Houston, TX, Cabot Oil & Gas is an independent oil and gas exploration company with producing properties mainly in the continental United States. The company has an Earnings ESP of +4.98% and sports a Zacks Rank #1.
Cimarex Energy is an independent oil & gas exploration and production firm. The company has an Earnings ESP of +0.97% and has a Zacks Rank #3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>