We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will EOG Resources (EOG) Surprise this Earnings Season?
Read MoreHide Full Article
EOG Resources, Inc. (EOG - Free Report) is set to release second-quarter 2016 financial results after the closing bell on Aug 4.
Last quarter, the company posted an adjusted loss of 83 cents per share, narrower than the Zacks Consensus Estimate of a loss of 87 cents. Substantial improvement in well productivity and cost reductions supported the results. Notably, the company had posted adjusted earnings of 3 cents in the year-ago quarter. The company slipped to loss in the first quarter due to persistent weakness in commodity prices. Let’s see how things are shaping up for this announcement.
EOG Resources is an exploration and production firm with a large oil exposure of about 46% net proved reserves. This makes it highly susceptible to the weakness in commodity price. Due to this, the company’s total capital expenditure budget is between $2.4 billion and $2.6 billion for 2016.
EOG Resources’ second-quarter total production is expected between 259.3MBoe/d and 273.5MBoe/d, which includes 71–79 MBbls/d of NGL and 1,095–1,171 MMcf/d of gas. For the second quarter and full year, the company expects crude oil and condensate volumes in the range of 512.7–547.7 MBbls/d and 512.3–550.4 MBbls/d, respectively.
However, EOG Resources’ sensitivity to gas/oil price volatility, as well as drilling results, costs, geo-political risks and project delays, limited the upside potential in the quarter. Price realization is an important component of the margin of exploration and production firms, considering the persistent rise in exploration costs.
Earnings Whispers
Our proven model does not conclusively show that EOG Resources is likely to beat estimates this quarter as it does not have the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%.
Zacks Rank: EOG Resources currently has a Zacks Rank #2 (Buy). Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
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.
Stocks to Consider
Here are some companies from the same space which, according to our model, have the right combination of elements to post an earnings beat this quarter.
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +25.00% and a Zacks Rank #1.
Legacy Reserves LP has an Earnings ESP of +12.50% and a Zacks Rank #2.
Spectra Energy Corp (SE - Free Report) has an Earnings ESP of +12.00 % 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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Will EOG Resources (EOG) Surprise this Earnings Season?
EOG Resources, Inc. (EOG - Free Report) is set to release second-quarter 2016 financial results after the closing bell on Aug 4.
Last quarter, the company posted an adjusted loss of 83 cents per share, narrower than the Zacks Consensus Estimate of a loss of 87 cents. Substantial improvement in well productivity and cost reductions supported the results. Notably, the company had posted adjusted earnings of 3 cents in the year-ago quarter. The company slipped to loss in the first quarter due to persistent weakness in commodity prices. Let’s see how things are shaping up for this announcement.
EOG RES INC Price and EPS Surprise
EOG RES INC Price and EPS Surprise | EOG RES INC Quote
Factors Likely to Affect Earnings
EOG Resources is an exploration and production firm with a large oil exposure of about 46% net proved reserves. This makes it highly susceptible to the weakness in commodity price. Due to this, the company’s total capital expenditure budget is between $2.4 billion and $2.6 billion for 2016.
EOG Resources’ second-quarter total production is expected between 259.3MBoe/d and 273.5MBoe/d, which includes 71–79 MBbls/d of NGL and 1,095–1,171 MMcf/d of gas. For the second quarter and full year, the company expects crude oil and condensate volumes in the range of 512.7–547.7 MBbls/d and 512.3–550.4 MBbls/d, respectively.
However, EOG Resources’ sensitivity to gas/oil price volatility, as well as drilling results, costs, geo-political risks and project delays, limited the upside potential in the quarter. Price realization is an important component of the margin of exploration and production firms, considering the persistent rise in exploration costs.
Earnings Whispers
Our proven model does not conclusively show that EOG Resources is likely to beat estimates this quarter as it does not have the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%.
Zacks Rank: EOG Resources currently has a Zacks Rank #2 (Buy). Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
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.
Stocks to Consider
Here are some companies from the same space which, according to our model, have the right combination of elements to post an earnings beat this quarter.
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +25.00% and a Zacks Rank #1.
Legacy Reserves LP has an Earnings ESP of +12.50% and a Zacks Rank #2.
Spectra Energy Corp (SE - Free Report) has an Earnings ESP of +12.00 % 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 >>