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Anadarko (APC) to Post Q2 Earnings: Is a Beat in the card?

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Anadarko Petroleum Corporation is scheduled to release second-quarter 2018 results on Jul 31. In the first quarter of 2018, this oil and gas company reported a positive earnings surprise of 20.93%.

What Does the Quantitative Model Predicts

A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. Our model shows that Anadarko Petroleum is likely to beat on earnings in the soon-to-be-reported quarter as it possesses the components.

Earnings ESP: The company’s Earnings ESP is +6.28% as the Most Accurate Estimate is 60 cents, higher than the Zacks Consensus Estimate of 57 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Anadarko Petroleum’s Zacks Rank #3, when combined with a positive Earnings ESP, increases the possibility of a beat.

 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.

Factors to Consider

Anadarko Petroleum’s strategy of shifting focus toward liquid-rich regions like the DJ and Delaware Basins as well as the deepwater Gulf of Mexico will increase oil volume and boost margins. The company is planning to invest nearly 85% of its planned capital expenditure in these regions which will drive production volumes.

The Zacks Consensus Estimate for the price per barrel of crude oil and condensate is pegged at $65, reflecting a rise from $47.19 in the prior-year quarter. The Zacks Consensus Estimate for Oil and Condensate daily volume is pegged at 358,000 barrels per day (Boe/d) reflecting year-over-year increase of 8.2%. These factors are going to have a positive impact on quarterly results.

The Zacks Consensus Estimate for second-quarter 2018 total average daily volumes is pegged at 633,000 BOE/d, indicating a 0.3% rise from 631,000 BOE/d reported in second-quarter 2017.

Other Stocks to Consider

Apart from Anadarko Petroleum, here are some other companies from the industry that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this quarter.

Comstock Resources Inc (CRK - Free Report) has an Earnings ESP of +31.16% and a Zacks Rank #1. The company is expected to release second-quarter 2018 results on Aug 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy Oil Corporation (MUR - Free Report) has an Earnings ESP of +5.99% and a Zacks Rank #2. The company is expected to release second-quarter 2018 results on Aug 8.

Cheniere Energy, Inc. (LNG - Free Report) has an Earnings ESP of +4.26% and a Zacks Rank #1. The company is expected to release second-quarter fiscal 2018 results on Aug 9.

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