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We expect natural gas processor and distributor, MarkWest Energy Partners LP (MWE - Analyst Report), to beat expectations when the partnership reports its first-quarter 2013 results after the closing bell on May 8, 2013.

Why a Likely Positive Surprise?

Our proven model shows that MarkWest is likely to beat earnings because it has the right combination of two key factors. 

Positive Zacks ESP:Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate estimate of 33 cents and the Zacks Consensus Estimate of 32 cents, stands at +3.13%. This is a meaningful and leading indicator of a likely positive earnings surprise for units. 

Zacks Rank #3 (Hold):The stocks with a Zacks Rank of #1 (Strong buy), #2 (Buy) and #3 (Hold) have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5) should never be considered while going into an earnings announcement.

The combination of MarkWest’s Zacks Rank #3 (Hold) and +3.13% ESP makes us very confident in looking for a positive earnings beat on May 8, 2013. 

What is Driving the Better-Than-Expected Earnings?

We like MarkWest’s high-quality and diverse portfolio of midstream assets, which generates stable and recurring revenues from long-term fee-based contracts. Moreover, we remain particularly bullish about MarkWest’s prospects in the Marcellus Shale play in western Pa. and W.Va.

In addition, MarkWest is one of the largest processors of natural gas in the Northeast and is also the largest gatherer of natural gas in the prolific Carthage field in East Texas.

Moreover, the partnership has a number of other gas gathering and intrastate gas transmission assets in the Southwest, primarily in Texas and Okla. 

Finally, we remain upbeat as MarkWest recently raised its first-quarter 2013 cash distribution to 83 cents per unit ($3.32 per unit annualized), representing an increase of approximately 1.2% sequentially and 5.1% year over year.

Other Stocks to Consider

Other oil and gas companies you may consider on the basis of our model, which have the right combination of elements to post an earnings beat this quarter are as follows:

SemGroup Corp.(SEMG - Snapshot Report) has an earnings ESP of +22.50% and a Zacks Rank #1 (Strong Buy).

Delek US Holdings Inc.(DK - Snapshot Report) has an earnings ESP of +0.86% and a Zacks Rank #3 (Hold).

Northern Tier Energy LP(NTI - Snapshot Report) has an earnings ESP of +6.48% and Zacks Rank #3 (Hold).

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