We are in the thick of the Q2 earnings season, with 189 S&P 500 members coming up with results this week.

Picture Emerging Thus Far

We now have Q2 results from 126 S&P 500 members that combined account for account for 32.7% of the index’s total market capitalization. Total earnings for these companies are down 1.1% from the same period last year on 2.6% higher revenues, with 70.6% positive earnings surprises and 55.6% beating revenue estimates. (Data from the Earnings Trends report dated Jul 22, 2016).

Energy: A Drag but Not as Bad as Thought

Expectedly, the ‘Energy’ sector has been a big drag on the aggregate growth picture. For the sector components on the S&P 500 index that have reported Q2 results, total earnings are down 70.1% on 24.2% lower revenues.

But the Energy sector’s results are so far better than expected, with 60.0% of companies beating earnings estimates – though undoubtedly aided by low expectations.

Oil & Gas Performance in Q2

Unlike the previous few quarters, second-quarter 2016 turned out to be a rather good one with crude advancing more than 26% sequentially -- the best quarterly percentage gain in seven years – while natural gas prices jumped 49%, the most since 2005.

Oilfield Services Providers in Focus

Among energy components, the oil services providers – suppliers of technical products and services to drillers of oil and gas wells – are usually among the first few companies to release earnings after the end of each quarter.

With U.S. rig count falling to record levels, oilfield services players have braced themselves for a prolonged period of contraction in drilling activity. Moreover, as the 2016 budget cycle represents a further fall in upstream players’ capital spending, product and service pricing will suffer. This, coupled with project delays and job cancellations, is likely to translate into margin contraction. Needless to say, profitability levels will suffer.

Therefore, notwithstanding the nice bump in oil prices, it will take some time for service providers to translate it into earnings gain.

Oilfield Equipment and Service Providers to Watch for Earnings on July 27

Let’s see what’s in store for three such companies expected to come up with second-quarter numbers on Wednesday, Jul 27. Let’s take a look at how things are shaping up at their end.

The world’s fourth largest diversified oil services company, Weatherford International plc is expected to report results after the closing bell. Following Halliburton Co. (HAL Quick QuoteHAL - Free Report) and Schlumberger Ltd.’s (SLB Quick QuoteSLB - Free Report) earnings release last week, Weatherford will become the third member of the ‘big 4 oil service companies’ to come out with quarterly numbers.

In the first quarter of 2016, this Baar, Switzerland-headquartered equipment and services provider to the worldwide energy industry reported weaker-than-expected numbers on challenging market conditions –– both in terms of pricing and activity.

An earnings beat is uncertain for Weatherford this time around too. This is because, as per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. Simultaneously, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

For the quarter to be reported, Weatherford has an Earnings ESP of 0.00%, while it carries a Zacks Rank #3. (Read more: Weatherford International Q2 Earnings: What's Up?)

Headquartered in London, U.K., Noble Corp. plc (NE Quick QuoteNE - Free Report) is also set to report second-quarter results after the closing bell. The company is a leading provider of offshore contract drilling services worldwide. Coming to earnings the surprise history, Noble has a mixed track of having beaten estimates in two of the last four quarters, resulting in an average positive surprise of 9.53%.

Our proven model shows that Noble Corp. is likely to beat earnings in the to-be-reported quarter, given the combination of a Zacks Rank #3 (Hold) and Earnings ESP of +14.29%. (Read more: Noble Corporation Q2 Earnings: A Beat in the Cards?)

RPC Inc. (RES Quick QuoteRES - Free Report) is another oilfield services provider to report second-quarter results before the market opens.

Headquartered in Atlanta, GA, RPC provides broad range of specialized services – including pressure pumping and coiled tubing – to independent oil and gas explorers throughout the U.S.

Our model does not indicate that the company is likely to beat on earnings this time around. This is because RPC is a Zacks Rank #3 stock but has an Earnings ESP of 0.00%. As it is, the company has a poor track of earnings surprises, having beaten estimates in just one of the last four quarters.

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