CONSOL Energy Inc. (CNX - Free Report) is expected to report second-quarter 2017 results before the market opens on Aug 1. Last quarter, the coal and natural gas company reported a positive earnings surprise of 54.55%. Let’s find out what’s in store in this quarter.
Factors to Consider
CONSOL Energy is expected to continue with its debt reduction in second quarter supported by proceeds for the non-core assets sales and organic free cash flow generation.
Thanks to its drilling efficiency, reduction in transportation, gathering and compression costs CONSOL Energy expects its E&P margins to improve from the year-ago levels.
However, dependence on a limited group of customers for bulk sales of coal is a concern. In July, CONSOL Energy filed Form 10 with the U.S. Securities and Exchange Commission (SEC) to separate its Coal Mining and Exploration & Production (E&P) Division into two distinct publicly-traded companies.
Our proven model does not conclusively show that CONSOL Energy is likely to beat estimates this quarter as it does not have the right combination of the two key ingredients. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat estimates. However, that is not the case here, as elaborated below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: CONSOL Energy has an Earnings ESP of -10.00% since the Most Accurate estimate is 9 cents, lower than the Zacks Consensus Estimate of 10 cents.
Zacks Rank: CONSOL Energy’s Zacks Rank #3 increases the predictive power of ESP. However, when combined with -10.00% ESP, it makes surprise prediction difficult.
Note that 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
While CONSOL Energy failed to secure the required mix, here are a few companies from the Zacks categorized Sector that are likely to post a beat this earnings season.
CNX Coal Resources L.P. (CNXC - Free Report) is expected to release second-quarter 2017 results on Jul 31. The company has an Earnings ESP of +1.96% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Genesis Energy, L.P. (GEL - Free Report) is expected to release second-quarter 2017 results on Aug 2. The company has an Earnings ESP of +4.55% and a Zacks Rank #3.
Enbridge Inc. (ENB - Free Report) is expected to release second-quarter 2017 results on Aug 3. The company has an Earnings ESP of +38.24% and a Zacks Rank #3.
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