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HAL, HLX Q2 Earnings on Jul 23: Here Are the Key Predictions
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We are entering the heart of the Q2 earnings season, with a host of S&P 500 members expected to come out with results by the end of next week.
Picture Emerging Thus Far
We now have Q2 results from 48 S&P 500 members that combined account for 16.2% of the index’s total market capitalization. According to the latest Earnings Trends, total earnings for these companies are up 23% from the same period last year on 10% higher revenues, with 89.6% positive earnings surprises and 83.3% beating revenue estimates.
At this stage, we don’t have any results from the Energy sector. However, quite a few companies have earnings lined up pretty soon, and events are shaping up quite nicely for their report.
Q2 Report Card: Strong Oil Prices Should Favor Energy Service Companies
Posting its fourth-quarterly gain in a row, oil prices ended June 2018 up more than 14% sequentially. The commodity continued its bullish path during the April-June quarter after it got off to a strong start this year with the West Texas Intermediate (WTI) crude futures climbing about 7.5% in the first three months of 2018.
The second quarter saw the oil benchmark in the United States attain its highest settlement since November 2014 despite record high domestic production. Crude was supported by a variety of catalysts, including a series of buoyant weekly EIA crude inventory numbers, worries about tightening global supplies in the midst of strong demand, and doubts over OPEC’s ability to boost production.
To be precise, the commodity rose about 23% in the first six months of 2018 to finish June at $74.15 per barrel. A year ago, crude futures hovered around the $46 per barrel mark.
With crude prices having gone up and stabilized, investment in drilling activities (especially in North America) are on the rise. This should positively affect the demand and pricing of oilfield services companies - provider of technical products and services to drillers of oil wells.
Year-over-Year Gain Leads to Bullish Expectations
A look back at the Q1 earnings season reflects that the overall results of the Oil/Energy sector were spectacular, driving the aggregate growth picture for the S&P 500 index. The Jan-Mar 2018 period turned out to be a rather good one with earnings for the sector recording a 79.6% jump from the same period last year – by far the highest growth among all sectors – on 14.5% higher revenues.
The picture looks rather encouraging for the Q2 earnings season as well. This is not surprising, considering that oil averaged significantly higher compared to the second quarter of 2017.
In fact, the strongest growth in Q2 is again set to come from the Energy sector. As per our expectations, earnings for the sector are expected to jump 136.9% from the second quarter of 2017, while the top line is likely to show an improvement of 20.2% from the year-ago levels.
Stocks to Watch for Earnings on Jul 23
Let’s see what’s in store for two Houston-TX based oilfield service providers expected to come up with June-quarter numbers on Monday, Jul 23.
First, we have Halliburton Company (HAL - Free Report) – a leading provider of an array of services to energy producers – which is expected to report before the opening bell.
According to our quantitative model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase its odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
As it is, we caution against Sell-rated stocks (Zacks Ranks #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
In the previous quarter, Halliburton delivered an in-line quarter as robust North American drilling activity on the back of oil pricing strength were offset by problems in Venezuela and frack sand delivery delays.
When it comes to earnings surprises, the world's second-largest oilfield services company after Schlumberger Limited (SLB - Free Report) has an incredible history. Investors should note that Halliburton hasn’t missed earnings estimates since mid-2014. And our model indicates that the company is likely to beat on earnings this time around too.
For the quarter to be reported, this Houston, TX-headquartered company has an Earnings ESP of +0.14% and a Zacks Rank of 3, the right combination of two key ingredients. (Read more: Why an Earnings Beat Is Likely for Halliburton in Q2)
Helix Energy Solutions Group, Inc. (HLX - Free Report) is also set to report second-quarter 2018 results – after the closing bell.
The provider of deepwater oilfield services in the Gulf of Mexico comfortably went past the Zacks Consensus Estimate in the previous quarter as ‘Well Intervention’ revenues improved on higher oil prices and better utilization. Helix Energy has a good track of outperforming estimates in three of the last four quarters.
But our model does not indicate that the company is likely to beat on earnings this time around, as it has a Zacks Rank #3 and an Earnings ESP of -5.26%. Though a Zacks Rank of 3 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.
Helix Energy Solutions Group, Inc. Price and EPS Surprise
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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.
Image: Bigstock
HAL, HLX Q2 Earnings on Jul 23: Here Are the Key Predictions
We are entering the heart of the Q2 earnings season, with a host of S&P 500 members expected to come out with results by the end of next week.
Picture Emerging Thus Far
We now have Q2 results from 48 S&P 500 members that combined account for 16.2% of the index’s total market capitalization. According to the latest Earnings Trends, total earnings for these companies are up 23% from the same period last year on 10% higher revenues, with 89.6% positive earnings surprises and 83.3% beating revenue estimates.
At this stage, we don’t have any results from the Energy sector. However, quite a few companies have earnings lined up pretty soon, and events are shaping up quite nicely for their report.
Q2 Report Card: Strong Oil Prices Should Favor Energy Service Companies
Posting its fourth-quarterly gain in a row, oil prices ended June 2018 up more than 14% sequentially. The commodity continued its bullish path during the April-June quarter after it got off to a strong start this year with the West Texas Intermediate (WTI) crude futures climbing about 7.5% in the first three months of 2018.
The second quarter saw the oil benchmark in the United States attain its highest settlement since November 2014 despite record high domestic production. Crude was supported by a variety of catalysts, including a series of buoyant weekly EIA crude inventory numbers, worries about tightening global supplies in the midst of strong demand, and doubts over OPEC’s ability to boost production.
To be precise, the commodity rose about 23% in the first six months of 2018 to finish June at $74.15 per barrel. A year ago, crude futures hovered around the $46 per barrel mark.
With crude prices having gone up and stabilized, investment in drilling activities (especially in North America) are on the rise. This should positively affect the demand and pricing of oilfield services companies - provider of technical products and services to drillers of oil wells.
Year-over-Year Gain Leads to Bullish Expectations
A look back at the Q1 earnings season reflects that the overall results of the Oil/Energy sector were spectacular, driving the aggregate growth picture for the S&P 500 index. The Jan-Mar 2018 period turned out to be a rather good one with earnings for the sector recording a 79.6% jump from the same period last year – by far the highest growth among all sectors – on 14.5% higher revenues.
The picture looks rather encouraging for the Q2 earnings season as well. This is not surprising, considering that oil averaged significantly higher compared to the second quarter of 2017.
In fact, the strongest growth in Q2 is again set to come from the Energy sector. As per our expectations, earnings for the sector are expected to jump 136.9% from the second quarter of 2017, while the top line is likely to show an improvement of 20.2% from the year-ago levels.
Stocks to Watch for Earnings on Jul 23
Let’s see what’s in store for two Houston-TX based oilfield service providers expected to come up with June-quarter numbers on Monday, Jul 23.
First, we have Halliburton Company (HAL - Free Report) – a leading provider of an array of services to energy producers – which is expected to report before the opening bell.
According to our quantitative model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase its odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
As it is, we caution against Sell-rated stocks (Zacks Ranks #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
In the previous quarter, Halliburton delivered an in-line quarter as robust North American drilling activity on the back of oil pricing strength were offset by problems in Venezuela and frack sand delivery delays.
When it comes to earnings surprises, the world's second-largest oilfield services company after Schlumberger Limited (SLB - Free Report) has an incredible history. Investors should note that Halliburton hasn’t missed earnings estimates since mid-2014. And our model indicates that the company is likely to beat on earnings this time around too.
For the quarter to be reported, this Houston, TX-headquartered company has an Earnings ESP of +0.14% and a Zacks Rank of 3, the right combination of two key ingredients. (Read more: Why an Earnings Beat Is Likely for Halliburton in Q2)
Halliburton Company Price and EPS Surprise
Halliburton Company Price and EPS Surprise | Halliburton Company Quote
Helix Energy Solutions Group, Inc. (HLX - Free Report) is also set to report second-quarter 2018 results – after the closing bell.
The provider of deepwater oilfield services in the Gulf of Mexico comfortably went past the Zacks Consensus Estimate in the previous quarter as ‘Well Intervention’ revenues improved on higher oil prices and better utilization. Helix Energy has a good track of outperforming estimates in three of the last four quarters.
But our model does not indicate that the company is likely to beat on earnings this time around, as it has a Zacks Rank #3 and an Earnings ESP of -5.26%. Though a Zacks Rank of 3 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.
Helix Energy Solutions Group, Inc. Price and EPS Surprise
Helix Energy Solutions Group, Inc. Price and EPS Surprise | Helix Energy Solutions Group, Inc. Quote
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.
See This Ticker Free >>