Oil pipeline and storage partnership Magellan Midstream Partners L.P. ( MMP - Analyst Report ) is set to release its fourth-quarter 2012 results before the opening bell tomorrow, Tuesday, Feb 5.

In the preceding quarter, Magellan delivered a negative 20.45% earnings surprise, pulled down by poor contribution from all its business units. Let’s see how things are shaping up prior to this announcement.

Factors to Consider This Quarter

The operating scenario for pipeline operators will remain critical in the near to medium term. Magellan is also susceptible to lower-than-expected demand for refined products, commodity price fluctuations and cost overruns on expansion projects.

Moreover, depressed commodity margins and high maintenance capital expenditure may adversely affect the partnership’s earnings and cash flows.

In fact, the Zacks Consensus Estimate for the fourth quarter has moved down by 4 cents to 65 cents per unit over the last 30 days as the tendency for a downward estimate revision was more obvious.

Earnings Whispers

Our proven model does not conclusively show that Magellan Midstream is likely to beat the Zacks Consensus Estimate in the fourth quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1 (Strong Buy) or at least Zacks Rank #2 (Buy) or Zacks Rank #3 (Hold) for this to happen. Unfortunately this is not the case here as elaborated below.

Negative Zacks ESP: This is because the Most Accurate estimate stands at 60 cents, while the Zacks Consensus is higher at 65 cents. This results in a difference of -7.69%.

Zacks Rank #3 (Hold): Magellan Midstream’s Zacks Rank #3 (Hold), however, increases the predictive power of ESP. That said, we also need to have a positive ESP to be confident of an earnings surprise call.

Other Stocks to Consider

Here are some other firms you may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter:

Northern Tier Energy L.P. ( NTI - Snapshot Report ) , Earnings ESP of +7.97% and Zacks Rank #1 (Strong Buy).

Hercules Offshore Inc. ( HERO - Snapshot Report ) , Earnings ESP of +14.29% and Zacks Rank #2 (Buy).

Sunoco Logistics L.P. ( SXL - Analyst Report ) , Earnings ESP of +7.69% and Zacks Rank #2 (Strong).