The second quarter brought back hopes for oil that fell to its 12-year low of $26.21 in February. Subsequently, supply outages round the globe pushed the price of the commodity by almost 90% taking the commodity past the $50 per barrel mark. While only a handful of companies from the energy sector have reported second-quarter numbers so far, we wait to see how the price rise influenced the performance of big players, when they come up with their results in the upcoming days.
What’s in Store for Oil Stocks?
Let’s take a look at the overall movement of oil prices in the second quarter. Crude, in sharp contrast to the previous few quarters, advanced more than 26% sequentially during the April–June period. West Texas Intermediate (WTI) crude futures during the second quarter hovered mostly between $40 and $50 per barrel. This gradual recovery was aptly echoed by the latest weekly release of the Houston-based oilfield services company Baker Hughes Inc. that reported the third consecutive rise in the U.S. oil rig count.
However, although data point to a recovery, the numbers may not yet be rosy for upstream energy players that include oil and gas exploration and production companies, and drilling and oilfield services players. This is because oil price is still hovering well below $50, which is far below the breakeven price for many energy companies. To manage the situation, oil companies are cutting headcount, postponing new projects, and renegotiating contracts to keep their liquidity intact. Yesterday’s earnings miss by major oilfield services provider, Halliburton Company (HAL - Free Report) , shows that this quarter will also hold much pain for oil players.
This is aptly showed in the Earnings Trends report, which says that the Oil/Energy sector’s earnings are expected to crash 77.1% from the second-quarter 2015 levels, while the top line is likely to show a drop of 25.7%.
Definitely the scenario was unfavorable for the upstream energy players that include oil and gas exploration and production companies, and drilling and oilfield services players. This is because oil price has a positive correlation with the operations of these companies.
Given the persistent weakness in commodity prices, investors are eager to find out how oil and natural gas stocks will fare this earnings season. Let’s take a look at the expected earnings performance of three oil companies that are scheduled to post Q2 results shortly.
Superior Energy Services, Inc. is expected to report second-quarter results on Jul 25. The company has an Earnings ESP of +1.75% and a Zacks Rank #3 (Hold), which increases the predictive power of ESP.
Last quarter, the company had incurred an adjusted loss of 49 cents per share, narrower than the Zacks Consensus Estimate of a loss of 61 cents. This resulted in a positive earnings surprise of 19.67%. Moreover, the company outpaced the Zacks Consensus Estimate in three out of the last four quarters.
Bonanza Creek Energy, Inc. is slated to release second-quarter results on Jul 25. The company has an Earnings ESP of 0.00% and a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Last quarter, the company posted a positive earnings surprise of 30.67%. However, the company delivered positive surprises in only two out of the last four quarters, with an average negative surprise of 31.25%.
Enduro Royalty Trust is set to release second-quarter results on Jul 22. The company has an Earnings ESP of 0.00% and a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Last quarter, the company posted in-line numbers. Also, the company delivered in-line numbers in three out of the last four quarters.
Don’t miss out on our full earnings release articles for these three energy stocks, as the actual results might hold some surprises!
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 >>
The second quarter brought back hopes for oil that fell to its 12-year low of $26.21 in February. Subsequently, supply outages round the globe pushed the price of the commodity by almost 90% taking the commodity past the $50 per barrel mark. While only a handful of companies from the energy sector have reported second-quarter numbers so far, we wait to see how the price rise influenced the performance of big players, when they come up with their results in the upcoming days.
What’s in Store for Oil Stocks?
Let’s take a look at the overall movement of oil prices in the second quarter. Crude, in sharp contrast to the previous few quarters, advanced more than 26% sequentially during the April–June period. West Texas Intermediate (WTI) crude futures during the second quarter hovered mostly between $40 and $50 per barrel. This gradual recovery was aptly echoed by the latest weekly release of the Houston-based oilfield services company Baker Hughes Inc. that reported the third consecutive rise in the U.S. oil rig count.
However, although data point to a recovery, the numbers may not yet be rosy for upstream energy players that include oil and gas exploration and production companies, and drilling and oilfield services players. This is because oil price is still hovering well below $50, which is far below the breakeven price for many energy companies. To manage the situation, oil companies are cutting headcount, postponing new projects, and renegotiating contracts to keep their liquidity intact. Yesterday’s earnings miss by major oilfield services provider, Halliburton Company (HAL - Free Report) , shows that this quarter will also hold much pain for oil players.
This is aptly showed in the Earnings Trends report, which says that the Oil/Energy sector’s earnings are expected to crash 77.1% from the second-quarter 2015 levels, while the top line is likely to show a drop of 25.7%.
Definitely the scenario was unfavorable for the upstream energy players that include oil and gas exploration and production companies, and drilling and oilfield services players. This is because oil price has a positive correlation with the operations of these companies.
Given the persistent weakness in commodity prices, investors are eager to find out how oil and natural gas stocks will fare this earnings season. Let’s take a look at the expected earnings performance of three oil companies that are scheduled to post Q2 results shortly.
Superior Energy Services, Inc. is expected to report second-quarter results on Jul 25. The company has an Earnings ESP of +1.75% and a Zacks Rank #3 (Hold), which increases the predictive power of ESP.
Last quarter, the company had incurred an adjusted loss of 49 cents per share, narrower than the Zacks Consensus Estimate of a loss of 61 cents. This resulted in a positive earnings surprise of 19.67%. Moreover, the company outpaced the Zacks Consensus Estimate in three out of the last four quarters.
Bonanza Creek Energy, Inc. is slated to release second-quarter results on Jul 25. The company has an Earnings ESP of 0.00% and a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Last quarter, the company posted a positive earnings surprise of 30.67%. However, the company delivered positive surprises in only two out of the last four quarters, with an average negative surprise of 31.25%.
Enduro Royalty Trust is set to release second-quarter results on Jul 22. The company has an Earnings ESP of 0.00% and a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Last quarter, the company posted in-line numbers. Also, the company delivered in-line numbers in three out of the last four quarters.
Don’t miss out on our full earnings release articles for these three energy stocks, as the actual results might hold some surprises!
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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