The Q3 earnings season is in full swing with 291 of the S&P 500 Index members having already released results. Reported earnings were up 2.2% year over year on 1.3% higher revenues. This week too will see a string of earnings releases from more than 1000 companies (including 130 S&P members).
For the remaining index members, projections are of a 2.0% improvement in earnings on 1.4% higher revenues despite the expectations of a 65.4% plunge in earnings on 12.2% revenue deterioration for the energy space. Notably, this could be the first quarter to record positive earnings growth after five quarters of back-to-back declines.
Four out of the 16 sectors in the Zacks coverage universe are expected to witness an earnings decline this season. Read more details in our weekly Earnings Preview report.
Let us now focus on the coal industry, which is currently facing stiff competition from natural gas and alternate sources of energy. The fossil fuel is also grappling with challenges posed by the new emission standards that are compelling utilities to reduce dependence on coal for power generation. As a result, production and consumption of coal in the U.S. has been witnessing a steady decline.
But all hope is not lost for this space as a projected upside in natural gas prices will lead to higher coal burn in 2017. Per an EIA report for the Jan 2015–Apr 2016 period, nearly 87 GW of coal-fired plants have installed pollution control equipment to comply with the new emission standards, while many others are planning to do so. It’s thus evident that coal will continue to be used for electricity generation through the foreseeable future despite the increasingly stringent emission control regulations.
Two coal companies – Cloud Peak Energy and Alliance Resource Partners, L.P (ARLP - Free Report) – reported quarterly results last week, with both bottom-line figures surpassing the respective Zacks Consensus Estimate. With the earnings season in the coal sector picking up pace, let’s take a look at some companies that are scheduled to release earnings results this week.
CONSOL Energy (CNX - Free Report) is expected to report third-quarter earnings before the market opens on Nov 1. In the last reported quarter, this Zacks Rank #3 (Hold) company has reported a negative earnings surprise of 23.53%.
CONSOL Energy’s Earnings ESP, which represents the difference between the Most Accurate estimate of a loss of 12 cents and the Zacks Consensus Estimate of a loss of 11 cents, stands at -9.09%. However, according to our proven model, stocks with the combination of a positive ESP and a Zacks Rank #1 (Strong Buy) #2 (Buy) or #3 have a higher chance of beating estimates. (Read more: What's in Store for CONSOL Energy in Q3 Earnings?)
Hallador Energy Company (HNRG - Free Report) is slated to release third-quarter earnings after the market closes on Nov 4. Last quarter, the company reported a positive earnings surprise of 1050.0%. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hallador Energy’s Earnings ESP stands at 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 10 cents.
Rhino Resource Partners LP is scheduled to announce third-quarter results before the market opens on Nov 4. In the last reported quarter, it posted a positive earnings surprise of 437.04%. The company currently carries a Zacks Rank #3.
Rhino Resource Partners has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 55 cents.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
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