With the Q3 earnings season drawing to a close, we now have a clearer picture of the earnings trends. We note a sequential improvement in the quarter with a positive year-over-year growth in both earnings and revenues.
So far, 470 S&P 500 members – 94% of the index’s total market capitalization – have reported their results. Total earnings for these companies are up 3.8% due 2.6% growth in revenues, both on a year-over-year basis. While 73.2% of these companies beat earnings per share (EPS) estimates, 55.3% surpassed top-line expectations as of Nov 17).
Per the Earnings Trends report, the general outlook for the energy sector has improved vastly as the results were better than expectations. However, the sector continued to underperform on a year-over-year basis with a massive 63.3% decrease in earnings due to a 12.9% plunge in revenues. Excluding the impact of the energy sector, the S&P 500 Index witnessed earnings growth of 7.2% as revenues inched up 4.2%.
With most of the companies already having reported their financial results, let’s have a look at how some of these energy companies might fare this quarter when their reveal their Q3 numbers on Nov 21.
Africa Oil Corp. (AOIFF - Free Report) is primarily an oil and gas exploration and development company. The company has oil and gas interests in Kenya and Ethiopia, primarily in the East African Rift Basin. Africa Oil Corp. has a Zacks Rank #2 but an Earnings ESP of 0.00%. Despite the company’s favorable Zacks Rank, our surprise prediction is complicated by its 0.00% Earnings ESP. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Headquartered in Houston, TX, BP Prudhoe Bay Royalty Trust offers partial ownership in British oil giant BP plc’s (BP - Free Report) Prudhoe Bay oil field. The trust owners – with interest in the field – get cash payment from the revenues that BP generates after deducting production costs and taxes.
BP Prudhoe Bay Royalty Trust’s Earnings ESP of 0.00% complicates our surprise prediction in spite of its favorable Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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