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Major oilfield services provider Halliburton Co. (HAL - Analyst Report) is set to release its first-quarter 2013 results before the opening bell on Monday, Apr 22.

In the preceding three-month period, Halliburton delivered a positive 3.28% earnings surprise – the third outperformance in the last 4 quarters – helped by robust performance from its international business. Let’s see how things are shaping up prior to this announcement.

Factors to Consider This Quarter

With some relief in the cost for guar gum – a key constituent of the company’s market-leading hydraulic fracturing ('fracking') procedure – Halliburton expects its North American margins to stage a partial recovery. However, utilization and pricing pressures in the region will continue to affect the bellwether’s profitability    

More alarmingly, with the quarterly domestic land rig count falling by some 3% sequentially, there is a considerable risk to Halliburton numbers because of its heavy U.S. leverage. Additionally, the recent weakness in crude prices has raised questions about a possible decline in oil service demand from operators like Halliburton.  

Earnings Whispers?

Our proven model does not conclusively show that Halliburton is likely to beat the Zacks Consensus Estimate in the first 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 57 cents, while the Zacks Consensus is higher at 58 cents. This results in a difference of -1.72%.

Zacks Rank #3 (Hold): Halliburton’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.

We caution against stocks with Zacks Rank #4 and 5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

Here are some energy 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:

Exterran Partners L.P. (EXLP - Snapshot Report), Earnings ESP of +4.35% and Zacks Rank #1 (Strong Buy).

EPL Oil & Gas Inc. (EPL - Snapshot Report), Earnings ESP of +9.76% and Zacks Rank #1 (Strong Buy).

SemGroup Corp. (SEMG - Snapshot Report), Earnings ESP of +5.26% and Zacks Rank #1 (Strong Buy).

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