We are in the thick of the Q2 earnings season, with results from 286 S&P 500 companies that account for almost 68.8% of the index’s total membership. According to the latest Earnings Trend, overall earnings for these companies are up 11.3% from the year-ago comparable period on 6.1% higher revenues. While 74.5% companies delivered positive earnings surprises, 69.2% beat revenue estimates.
The overall financial performance so far this earnings cycle reflects optimism. True to predictions, the sector has witnessed positive growth. The picture looks rather encouraging for the upcoming earnings season. This is not surprising, considering that oil and gas are both averaging higher compared with the second quarter of 2016, wherein energy companies reported unusually low bottom-line. While earnings for the Oil/Energy sector are set to jump a massive 249%, the highest year-over-year growth among all sectors, the top line is likely to display a growth of 16.5% from the second quarter 2016 levels.
Stocks to Watch for Earnings on Aug 1
Let’s see what’s in store for these three energy companies that are expected to report Q2 results on Aug 1.
EOG Resources Inc. (EOG - Free Report) , one of the leading upstream energy players, is expected to report financial results, after market closes.
Last quarter, the company posted earnings of 15 cents per share, in line with the Zacks Consensus Estimate. In the year-earlier quarter, the company reported a loss of 83 cents.
Our model does not indicate that EOG Resources is likely to beat on earnings. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat on earnings.
EOG Resources currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, a 0.00% Earnings ESP complicates our surprise prediction. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
As it is, 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.
Devon Energy Corporation (DVN - Free Report) is scheduled to report Q2 results after the closing bell.
Last quarter, Devon Energy had reported adjusted earnings of 41 cents per share, which beat the Zacks Consensus Estimate of 40 cents. The company delivered a positive earnings surprise of 2.50% in the last quarter. Moreover, the company outpaced the Zacks Consensus Estimate in all of the last four quarters.
Our proven model does not conclusively show that Devon Energy is likely to beat the Zacks Consensus Estimate this quarter. The company has an Earnings ESP of +6.06% and a Zacks Rank #4. Though a positive ESP increases the predictive power, the company’s Zacks rank makes surprise prediction difficult. (Read more: What's in the Cards for Devon Energy in Q2 Earnings?)
Newfield Exploration Company (NFX - Free Report) is expected to report Q2 results after the closing bell.
Last quarter, Newfield Exploration had posted adjusted earnings of 57 cents per share, which beat the Zacks Consensus Estimate of 45 cents. The company delivered a positive earnings surprise of 26.67% in the last quarter. Moreover, it outpaced the Zacks Consensus Estimate in three of the last four quarters.
Our proven model does not conclusively show that the company is likely to beat the Zacks Consensus Estimate this quarter. The company has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). Therefore, the Zacks Rank and 0.00% Earnings ESP makes surprise prediction difficult. (Read more: Is Newfield Stock Likely to Disappoint in Q2 Earnings?)
You can see the complete list of today’s Zacks #1 Rank stocks here.
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