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What's in Store for Cimarex Energy (XEC) in Q3 Earnings?
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Independent oil & gas exploration and production firm, Cimarex Energy Company is expected to release third-quarter 2016 results on Nov 2, after the closing bell.
Last quarter, the company delivered a positive average surprise of 600.00% despite low commodity prices. However, the company has missed the Zacks Consensus Estimate in three of the past four quarters, with an average negative surprise of 129.84%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
The pricing scenario for natural gas was much better in the third quarter, both on a sequential and an annualized basis. However, oil prices were weaker than the July-September quarter of 2015.
Since Cimarex Energy is an upstream energy player, it generates cash flow after selling the commodities. Hence, its financials completely depend on oil and gas prices. Though selling natural gas will support the company’s profitability, the oil price weakness raises concerns.
In the production front, the company forecast third-quarter 2016 output of 950–980 million cubic feet equivalent per day (MMcfe/D). It is to be noted that during second quarter 2016 and year-ago comparable quarter the company produced in the projected range.
Although there is no prediction for improvement on the production front the commodity pricing scenario might limit the company’s profitability.
Earnings Whispers
Our proven model does not conclusively show that Cimarex Energy is likely to beat results this quarter. That 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: Cimarex Energy has an Earnings ESP is -2.63%. This is because the Most Accurate estimate stands at 37 cents while the Zacks Consensus Estimate was pegged higher at 38 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Cimarex carries a Zacks Rank #3. Despite the company’s favorable Zacks Rank, its negative Earnings ESP complicates our surprise prediction.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the announcement of the results, especially when the company is seeing negative estimate revisions.
While an earnings beat looks uncertain for Cimarex Energy, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Devon Energy Corp (DVN - Free Report) , which is expected to release earnings results on Nov 1, has an Earnings ESP of +20.00% and a Zacks Rank #2.
Spectra Energy Corp. (SE - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. The company is expected to release third-quarter earnings results on Nov 2.
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What's in Store for Cimarex Energy (XEC) in Q3 Earnings?
Independent oil & gas exploration and production firm, Cimarex Energy Company is expected to release third-quarter 2016 results on Nov 2, after the closing bell.
Last quarter, the company delivered a positive average surprise of 600.00% despite low commodity prices. However, the company has missed the Zacks Consensus Estimate in three of the past four quarters, with an average negative surprise of 129.84%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
The pricing scenario for natural gas was much better in the third quarter, both on a sequential and an annualized basis. However, oil prices were weaker than the July-September quarter of 2015.
Since Cimarex Energy is an upstream energy player, it generates cash flow after selling the commodities. Hence, its financials completely depend on oil and gas prices. Though selling natural gas will support the company’s profitability, the oil price weakness raises concerns.
In the production front, the company forecast third-quarter 2016 output of 950–980 million cubic feet equivalent per day (MMcfe/D). It is to be noted that during second quarter 2016 and year-ago comparable quarter the company produced in the projected range.
Although there is no prediction for improvement on the production front the commodity pricing scenario might limit the company’s profitability.
Earnings Whispers
Our proven model does not conclusively show that Cimarex Energy is likely to beat results this quarter. That 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: Cimarex Energy has an Earnings ESP is -2.63%. This is because the Most Accurate estimate stands at 37 cents while the Zacks Consensus Estimate was pegged higher at 38 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Cimarex carries a Zacks Rank #3. Despite the company’s favorable Zacks Rank, its negative Earnings ESP complicates our surprise prediction.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the announcement of the results, especially when the company is seeing negative estimate revisions.
CIMAREX ENERGY Price and EPS Surprise
CIMAREX ENERGY Price and EPS Surprise | CIMAREX ENERGY Quote
Stocks to Consider
While an earnings beat looks uncertain for Cimarex Energy, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Vertex Energy Inc (VTNR - Free Report) , which is expected to release earnings results on Nov 3, has an Earnings ESP of +37.50% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Devon Energy Corp (DVN - Free Report) , which is expected to release earnings results on Nov 1, has an Earnings ESP of +20.00% and a Zacks Rank #2.
Spectra Energy Corp. (SE - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. The company is expected to release third-quarter earnings results on Nov 2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>