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Noble Energy (NBL) Q2 Earnings: Is Disappointment in Store?

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Noble Energy, Inc. (NBL - Free Report) is scheduled to report second-quarter 2017 results on Aug 3 before the opening bell. Last quarter, the company reported a positive earnings surprise of 61.54%. Let’s see how things are shaping up for this quarter.

Factors to Consider

Noble Energy forecasts a 30,000 barrel per day increase in liquids volumes from the first quarter mainly owing to higher number of wells brought online in the DJ Basin, Eagle Ford and the Delaware area.

The company's portfolio of assets in Israel compliments its strong U.S. onshore outlook for the second quarter. This can be attributed to its sanctioning the initial phase of Leviathan project, the largest gas project in the Eastern Mediterranean region. This project is a valuable addition to the portfolio of assets along with favorable returns from Tamar.

The company expects total sales volume in crude oil and condensate, natural gas liquids and natural gas in the range of 405 thousand barrels of oil equivalents per day (MBoed) to 415 MBoed in the to-be-reported quarter. It anticipates organic capital expenditures between $650 million and $750 million, an increase from the first quarter driven primarily by timing of Leviathan drilling and major project spending.

Noble Energy Inc. Price, Consensus and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that Noble Energy is likely to beat earnings this quarter. 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) for this to happen. But that is not the case here, as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate of a loss of 13 cents and the Zacks Consensus Estimate of a loss of 12 cents, is -8.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Though Noble Energy’s Zacks Rank #3 increases the predictive power of the ESP, its negative ESP makes a beat unlikely this season.

Note that we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few players in the same industry that have the right combination of elements to post an earnings beat this quarter.

Cheniere Energy, Inc. (LNG - Free Report) has an Earnings ESP of +2,200% and a Zacks Rank #3. It is scheduled to report second-quarter earnings on Aug 8.

WPX Energy, Inc. (WPX - Free Report) is expected to report second-quarter 2017 earnings on Aug 2. It has an Earnings ESP of +6.25% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chesapeake Energy Corporation (CHK - Free Report) has an Earnings ESP of +7.14% and a Zacks Rank #3. It is slated to report second-quarter earnings on Aug 3.

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