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| Company Name | Symbol | %Change |
|---|---|---|
| EAGLE BULK S | EGLE | 4.55% |
| RADIANT LOGI | RLGT | 4.22% |
| FEDERAL MOGU | FDML | 4.16% |
| VIPSHOP HOLD | VIPS | 4.12% |
| SUMMER INFAN | SUMR | 3.31% |
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We expect global oil and gas exploration and production company Murphy Oil Corporation ( MUR - Analyst Report ) to beat expectations when it reports fourth-quarter 2012 results on Jan 30, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Murphy Oil is likely to beat earnings because it has the right combination of two key factors.
Positive Zacks ESP: Earnings Surprise Prediction or ESP (Read:Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at 3.05%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks #3 Rank (Hold): We note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement.
The combination of Murphy Oil’s Zacks Rank #3 (Hold) and 3.05% ESP makes us very confident in looking for a positive earnings beat on Jan 30, 2013.
What is Driving the Better Than Expected Earnings?
Murphy Oil’s diversified asset base along with steady capital investment program and cost-curtailment measures are expected to lead to a positive earnings surprise in the current quarter. Sales of UK assets are benefiting Murphy Oil’s overall performance, which in turn prompted the company to follow the same path in the U.S. The company intends to spin-off its U.S. downstream subsidiary, Murphy Oil USA, Inc.
The positive trend is seen in the trailing four quarter average surprise of 0.68%. The company’s third-quarter 2012 surprise was -2.50% due to weaker U.S. retail marketing margins, lower North American natural gas sales prices, and an after tax loss from foreign exchange transactions.
Other Stocks to Consider
Murphy Oil is not the only company looking up this earnings season. We also see likely earnings beat coming from other operators in the industry.
TransAtlantic Petroleum Ltd. ( TAT - Snapshot Report ) , Earnings ESP of +100.00% and Zacks Rank #2 (Buy)
ConocoPhillips ( COP - Analyst Report ) , Earnings ESP of +0.71% and Zacks Rank #3 (Hold)
Occidental Petroleum Corporation ( OXY - Analyst Report ) , Earnings ESP of +0.60% and Zacks Rank #3 (Hold)
Read the full reports :
Analyst Report on MUR
Analyst Report on COP
Analyst Report on OXY
Snapshot Report on TAT