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What's in the Cards for Ensco (ESV) This Earnings Season?

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Ensco plc is scheduled to report fourth-quarter 2017 results on Feb 27, before the opening bell.

Last quarter, the company delivered a positive earnings surprise of 68.8%. Moreover, Ensco delivered an average positive earnings surprise of 58% over the last four quarters.
 

Ensco plc Price and EPS Surprise

 

Ensco plc Price and EPS Surprise | Ensco plc Quote

 

Which Way Are Estimates Trending?

Let’s take a look at the estimate revisions to get a clear picture of analyst opinion on the stock before the earnings release.

The Zacks Consensus Estimate of a loss of 26 cents for the fourth quarter narrowed from a loss of 27 cents over the last 30 days, with one firm revising upward. The estimated figure reflects a year-over-year decline of about 389%.

Further, analysts polled by Zacks expect revenues of $452.3 million for the fourth quarter, showing a fall of 10.4% from the year-ago quarter.

Factors to Consider

In December 2017, the global count of rig exploring for oil and natural gas rose from 1,772 to 2,089, per a report of oilfield services player Baker Hughes, a GE company (BHGE). Higher rig operations in the prospective resources indicate increased activities of drillers, Ensco being no exception.

Also, eroding cash balance since 2017 is a matter of concern.

Since 2015, there has been a substantial decline in net cash flow from the company’s operations. This reflects persistent weakness in the company’s operations amid volatile commodity pricing scenario.

Q4 Price Performance

During the quarter, the company’s shares declined 1% against the industry’s 7.1% rally.



 

Earnings Whispers

Our proven model does not conclusively show that Ensco will beat earnings this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.  

Zacks ESP: Earnings ESP for the company is -12.28% as the Most Accurate estimate is a loss of 30 cents, while the Zacks Consensus Estimate is pegged at a loss of 26 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  

Zacks Rank: Ensco carries a Zacks Rank #3.

Please note that we caution against stocks with Zacks Rank #4 and 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.   

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Houston, TX-based EOG Resources (EOG - Free Report) is a major independent oil and gas exploration and production company. The company has an Earnings ESP of +1.92% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

ProPetro Holding (PUMP - Free Report) is an oilfield service provider. The company has an Earnings ESP of +13.16% and sports a Zacks Rank #1.

Headquartered in Bristol, US, Contura Energy supplies metallurgical and thermal coal to generate power. The company has an Earnings ESP of +31.93% and flaunts a Zacks Rank #1.

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