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Occidental (OXY) Q4 Earnings: Will it Beat Estimates Again?

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We expect Occidental Petroleum Corporation (OXY - Free Report) to beat earnings estimates when it releases fourth-quarter 2017 financial results after the market closes on Feb 13. In the third quarter, the oil and gas company delivered a positive earnings surprise of 63.64%.

Why a Likely Surprise?

Our proven model shows that Occidental Petroleum is likely to beat estimates 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. This is the case here, as you will see below.

Zacks ESP: Occidental Petroleum has an Earnings ESP of +1.63%.
 
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Occidental Petroleum’s Zacks Rank #1 when combined with the positive ESP, increases the possibility of earnings surprise.

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.

Factors to Consider

Occidental Petroleum expects Permian Resources volumes to be 30% higher than the fourth-quarter 2016 levels, primarily due to the four rigs added in the region during mid-2017.

The Zacks Consensus Estimate for average daily production is 635,000 barrels of oil equivalent per day (boe/d), reflecting year-over-year and sequential growth of 4.6% and 5.8%, respectively. This is within Occidental Petroleum’s expectation of 633,000 to 641,000 boe/d.  The company will also benefit from the improving oil prices.

Contribution from its Chemical segment is expected to be $190 million in the fourth quarter, down sequentially due to seasonality in the business.

The Zacks Consensus Estimate for total revenues and earnings for the quarter stand at $3,504 million and 39 cents, respectively, reflecting sequential growth of 12.8% and 116.7%.

Other Stocks to Consider
                    
Occidental Petroleum is not the only company with the right parameters to come out with earning surprise this season. We have a few players in the Zacks Oil and Energy sector, which have the right combination of elements to post an earnings beat this quarter.

EOG Resources Inc. (EOG - Free Report) has an Earnings ESP of +4.06% and Zacks Rank 1. It is expected to report fourth-quarter 2017 earnings on Feb 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ecana Corporation (ECA - Free Report) has an Earnings ESP of +2.04% and Zacks Rank 3. It is expected to report fourth-quarter 2017 earnings on Feb 15.

Apache Corporation (APA - Free Report) has an Earnings ESP of +0.22% and Zacks Rank 3. It is expected to report fourth-quarter 2017 earnings on Feb 22.

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