We are in the thick of fourth-quarter earnings season, with results on board from 358 S&P 500 members that combined account for almost 71.6% of the index’s total market capitalization. According to the latest Earnings Preview, overall earnings for these companies are up 6.1% from the same period last year on 4.6% higher revenues, with 69% positive earnings surprises and 54.7% beating revenue estimates.
Energy: Finally showing Earnings Growth
Following eight back-to-back quarters of earnings decline, analysts said that the sector was likely to recover in the fourth quarter and clock its first positive earnings growth after years. With estimate revisions going up following OPEC’s Algeria grandstand, the Oil/Energy sector’s earnings were expected to improve 11.5% from fourth-quarter 2015 levels.
True to the predictions, the sector has come out swinging. For the 52.8% of Oil & Energy companies on the S&P 500 index that have reported fourth-quarter results, total earnings are up 11.3% on 2.9% higher revenues. While 63.2% of the companies have been successful in beating earnings estimates, 68.4% have outperformed the top line.
The Oil/Energy sector’s positive growth largely reflects better-than-expected quarterly profit from bellwether ExxonMobil Corp. (XOM), which more than offset smaller rival Chevron Corp.’s (CVX) disappointing fourth-quarter numbers.
Let's take a look at how oil and gas prices behaved during the fourth quarter.
Q4: Rebounding Oil & Natural Gas Prices
The OPEC deal and extreme weather conditions engineered a hefty rise in oil and gas prices during the fourth quarter.
A historic OPEC production cut agreement, together with help from non-OPEC producers saw oil prices end the year at $53.72 a barrel – representing a gain of 11.4% sequentially and 45% for the year.
Meanwhile, natural gas has embarked on an upward journey, with futures jumping around 25% in the fourth quarter. Ending the year at $3.724 per million Btu (MMBtu) – up 59% from 2015 – the heating fuel was buoyed by a cold snap that translated into strong demand.
Stocks to Watch for Earnings on Feb 14
Let us take a look at three important Energy stocks that are all expected to report fourth-quarter results on Feb 14.
Devon Energy Corporation (DVN - Free Report) reported a positive earnings surprise of 80.0% in the last quarter.
Our proven model does not conclusively show that Devon Energyis likely to beat on earnings 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. But that is not the case here.
Devon Energy carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Devon Energy has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 19 cents. (Read more: What's in Store for Devon Energy in Q4 Earnings?)
Noble Energy, Inc. reported a positive earnings surprise of 68.18% in the previous quarter. It carries a Zacks Rank #3.
However, the company has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 9 cents. (Read more: What's in Store for Noble Energy This Earnings Season?)
Diamondback Energy, Inc. (FANG - Free Report) , a Zacks Rank #3 stock, reported a positive earnings surprise of 54.29% last quarter.
However, the company has an Earnings ESP of -3.70%. This is because the Most Accurate estimate stands at 52 cents and the Zacks Consensus Estimate is pegged higher at 54 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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 >>
We are in the thick of fourth-quarter earnings season, with results on board from 358 S&P 500 members that combined account for almost 71.6% of the index’s total market capitalization. According to the latest Earnings Preview, overall earnings for these companies are up 6.1% from the same period last year on 4.6% higher revenues, with 69% positive earnings surprises and 54.7% beating revenue estimates.
Energy: Finally showing Earnings Growth
Following eight back-to-back quarters of earnings decline, analysts said that the sector was likely to recover in the fourth quarter and clock its first positive earnings growth after years. With estimate revisions going up following OPEC’s Algeria grandstand, the Oil/Energy sector’s earnings were expected to improve 11.5% from fourth-quarter 2015 levels.
True to the predictions, the sector has come out swinging. For the 52.8% of Oil & Energy companies on the S&P 500 index that have reported fourth-quarter results, total earnings are up 11.3% on 2.9% higher revenues. While 63.2% of the companies have been successful in beating earnings estimates, 68.4% have outperformed the top line.
The Oil/Energy sector’s positive growth largely reflects better-than-expected quarterly profit from bellwether ExxonMobil Corp. (XOM), which more than offset smaller rival Chevron Corp.’s (CVX) disappointing fourth-quarter numbers.
Let's take a look at how oil and gas prices behaved during the fourth quarter.
Q4: Rebounding Oil & Natural Gas Prices
The OPEC deal and extreme weather conditions engineered a hefty rise in oil and gas prices during the fourth quarter.
A historic OPEC production cut agreement, together with help from non-OPEC producers saw oil prices end the year at $53.72 a barrel – representing a gain of 11.4% sequentially and 45% for the year.
Meanwhile, natural gas has embarked on an upward journey, with futures jumping around 25% in the fourth quarter. Ending the year at $3.724 per million Btu (MMBtu) – up 59% from 2015 – the heating fuel was buoyed by a cold snap that translated into strong demand.
Stocks to Watch for Earnings on Feb 14
Let us take a look at three important Energy stocks that are all expected to report fourth-quarter results on Feb 14.
Devon Energy Corporation (DVN - Free Report) reported a positive earnings surprise of 80.0% in the last quarter.
Our proven model does not conclusively show that Devon Energyis likely to beat on earnings 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. But that is not the case here.
Devon Energy carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Devon Energy has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 19 cents. (Read more: What's in Store for Devon Energy in Q4 Earnings?)
Noble Energy, Inc. reported a positive earnings surprise of 68.18% in the previous quarter. It carries a Zacks Rank #3.
However, the company has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 9 cents. (Read more: What's in Store for Noble Energy This Earnings Season?)
Diamondback Energy, Inc. (FANG - Free Report) , a Zacks Rank #3 stock, reported a positive earnings surprise of 54.29% last quarter.
However, the company has an Earnings ESP of -3.70%. This is because the Most Accurate estimate stands at 52 cents and the Zacks Consensus Estimate is pegged higher at 54 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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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