By the second half of this month, energy players will start releasing second-quarter 2023 earnings. Thus, investors are keeping their eyes close on these companies. In the meantime, Exxon Mobil Corporation (XOM) announced its expectations for a significant drop in profit, citing declining natural gas prices and lower refining margins as the key reasons.
However, investors should not steer clear of energy companies as there are several players, such as PBF Energy Inc. (PBF - Free Report) , Precision Drilling Corporation (PDS - Free Report) and Baker Hughes Company (BKR - Free Report) , which are expected to beat earnings estimates in the second quarter.
Oil & Gas Prices Unimpressive
The pricing scenario of oil and natural gas was not impressive in the second quarter of this year. Per data provided by the U.S. Energy Information Administration (“EIA”), the average West Texas Intermediate crude prices per barrel in April, May and June were $79.45, $71.58 and $70.25, respectively. In comparison, in the respective year-ago months, average oil prices were $101.78, $109.55 and $114.84, according to EIA’s data.
Worries over a recession and economic slowdown possibly hurt oil and gas prices in the June-end quarter. Thus, like oil, the price of natural gas was lower significantly, thereby hurting the exploration and production activities of the major energy players.
ExxonMobil Expresses Concerns for Q2 Earnings
Among the leading energy players, ExxonMobil, in its recent SEC filing, expressed concerns over lower natural gas prices hurting its second-quarter earnings. XOM projects its upstream business’s earnings in the second quarter to be hurt by $1.8-$2.2 billion sequentially. ExxonMobil also expects its Energy Products business unit to be affected by $2-$2.2 billion in the June-end quarter, owing to lower industry margins.
How to Pick the Right Stocks?
Despite the negative backdrop, there are still some energy stocks that seem well-positioned to beat earnings estimates in the second quarter. However, it is by no means an easy task for investors to arrive at picks that have the potential to deliver better-than-expected earnings.
While there is no fool-proof method of picking outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks that have high chances of delivering a positive surprise in their upcoming earnings announcement. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
The Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Our Choices
PBF Energy, a leading North American refiner, is likely to have benefited from refined product production, primarily on the East Coast.
PBF Energy currently has an Earnings ESP of +4.13% and a Zacks Rank #3. The company is scheduled to release results on Aug 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Precision Drilling is a well-known name in the energy space, providing customers access to an extensive fleet of Super Series drilling rigs. Strict cost-control initiatives and disciplined capital allocation are likely to have aided PDS. Precision Drilling, scheduled to report earnings on Jul 27, has an Earnings ESP of +2.02% and a Zacks Rank of 3.
Baker Hughes is a leading oilfield service player and is likely to have benefited from its improved Oilfield Services and Equipment business unit. BKR, scheduled to release earnings on Jul 19, has an Earnings ESP of +1.36% and a Zacks Rank #3.
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Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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By the second half of this month, energy players will start releasing second-quarter 2023 earnings. Thus, investors are keeping their eyes close on these companies. In the meantime, Exxon Mobil Corporation (XOM) announced its expectations for a significant drop in profit, citing declining natural gas prices and lower refining margins as the key reasons.
However, investors should not steer clear of energy companies as there are several players, such as PBF Energy Inc. (PBF - Free Report) , Precision Drilling Corporation (PDS - Free Report) and Baker Hughes Company (BKR - Free Report) , which are expected to beat earnings estimates in the second quarter.
Oil & Gas Prices Unimpressive
The pricing scenario of oil and natural gas was not impressive in the second quarter of this year. Per data provided by the U.S. Energy Information Administration (“EIA”), the average West Texas Intermediate crude prices per barrel in April, May and June were $79.45, $71.58 and $70.25, respectively. In comparison, in the respective year-ago months, average oil prices were $101.78, $109.55 and $114.84, according to EIA’s data.
Worries over a recession and economic slowdown possibly hurt oil and gas prices in the June-end quarter. Thus, like oil, the price of natural gas was lower significantly, thereby hurting the exploration and production activities of the major energy players.
ExxonMobil Expresses Concerns for Q2 Earnings
Among the leading energy players, ExxonMobil, in its recent SEC filing, expressed concerns over lower natural gas prices hurting its second-quarter earnings. XOM projects its upstream business’s earnings in the second quarter to be hurt by $1.8-$2.2 billion sequentially. ExxonMobil also expects its Energy Products business unit to be affected by $2-$2.2 billion in the June-end quarter, owing to lower industry margins.
How to Pick the Right Stocks?
Despite the negative backdrop, there are still some energy stocks that seem well-positioned to beat earnings estimates in the second quarter. However, it is by no means an easy task for investors to arrive at picks that have the potential to deliver better-than-expected earnings.
While there is no fool-proof method of picking outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks that have high chances of delivering a positive surprise in their upcoming earnings announcement. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
The Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Our Choices
PBF Energy, a leading North American refiner, is likely to have benefited from refined product production, primarily on the East Coast.
PBF Energy currently has an Earnings ESP of +4.13% and a Zacks Rank #3. The company is scheduled to release results on Aug 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Precision Drilling is a well-known name in the energy space, providing customers access to an extensive fleet of Super Series drilling rigs. Strict cost-control initiatives and disciplined capital allocation are likely to have aided PDS. Precision Drilling, scheduled to report earnings on Jul 27, has an Earnings ESP of +2.02% and a Zacks Rank of 3.
Baker Hughes is a leading oilfield service player and is likely to have benefited from its improved Oilfield Services and Equipment business unit. BKR, scheduled to release earnings on Jul 19, has an Earnings ESP of +1.36% and a Zacks Rank #3.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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