Cloud Peak Energy Inc. is set to report second-quarter 2016 results on Jul 28. Last quarter, the company posted a negative earnings surprise of 253.33%. However, it has surpassed the Zacks Consensus Estimate in three of the four trailing quarters with an average positive surprise of 98.4%.
Let's see how things are shaping up prior this announcement.
Factors to Consider
Like all its peers, Cloud Peak Energy too was hurt by the drastic fall in coal demand, which consequently dragged its prices down. Natural gas and renewables are eating away coal’s share at a rapid pace due to their environment-friendly nature.In fact, dynamics of the coal industry have now become largely dependent on renewable output and natural gas prices.
In response to lackluster market fundamentals, Cloud Peak Energy has had to pursue aggressive cost cutting measures in order to boost margins.
The company is presently evaluating the scope and prospects of the Big Metal project, which is located on the Crow Tribe Reservation, as it believes the region will witness substantial demand for thermal coal from the U.S. and other countries over the long run.
Earnings Whispers
Our proven model does not conclusively show that Cloud Peak Energy will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 32 cents. Hence, the difference is 0.00%.
Zacks Rank: Cloud Peak Energy’s Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult.
Note that we caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
At present, we have only one company related to the coal industry worth considering on the basis of our model, which shows that it has the right combination of elements to post an earnings beat this quarter.
CONSOL Energy Inc. (CNX - Free Report) , with an Earnings ESP of +22.70% and a Zacks Rank #2.
However, you may also consider these oil & energy stocks, as our model shows that they too have the right combination of elements to post an earnings beat this quarter:
Murphy Oil Corporation (MUR - Free Report) has an Earnings ESP of +13.50% and a Zacks Rank #2.
Noble Energy, Inc. has an Earnings ESP of +6.25% and a Zacks Rank #2.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Cloud Peak Energy Inc. is set to report second-quarter 2016 results on Jul 28. Last quarter, the company posted a negative earnings surprise of 253.33%. However, it has surpassed the Zacks Consensus Estimate in three of the four trailing quarters with an average positive surprise of 98.4%.
Let's see how things are shaping up prior this announcement.
Factors to Consider
Like all its peers, Cloud Peak Energy too was hurt by the drastic fall in coal demand, which consequently dragged its prices down. Natural gas and renewables are eating away coal’s share at a rapid pace due to their environment-friendly nature.In fact, dynamics of the coal industry have now become largely dependent on renewable output and natural gas prices.
In response to lackluster market fundamentals, Cloud Peak Energy has had to pursue aggressive cost cutting measures in order to boost margins.
The company is presently evaluating the scope and prospects of the Big Metal project, which is located on the Crow Tribe Reservation, as it believes the region will witness substantial demand for thermal coal from the U.S. and other countries over the long run.
Earnings Whispers
Our proven model does not conclusively show that Cloud Peak Energy will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 32 cents. Hence, the difference is 0.00%.
Zacks Rank: Cloud Peak Energy’s Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult.
Note that we caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
At present, we have only one company related to the coal industry worth considering on the basis of our model, which shows that it has the right combination of elements to post an earnings beat this quarter.
CONSOL Energy Inc. (CNX - Free Report) , with an Earnings ESP of +22.70% and a Zacks Rank #2.
However, you may also consider these oil & energy stocks, as our model shows that they too have the right combination of elements to post an earnings beat this quarter:
Murphy Oil Corporation (MUR - Free Report) has an Earnings ESP of +13.50% and a Zacks Rank #2.
Noble Energy, Inc. has an Earnings ESP of +6.25% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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