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Will Adverse Weather Hurt Occidental's (OXY) Q1 Earnings?

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Occidental Petroleum Corporation (OXY - Free Report) is scheduled to report first-quarter 2018 results after the market closes on May 8. In the fourth quarter, the oil and gas company delivered a positive earnings surprise of 2.50%.

Let’s see how things are shaping up before this earnings announcement.

Factors to Consider

Occidental Petroleum expects first-quarter production to be in the range of 592,000-603,000 barrels of oil equivalent per day (boe/d) and Permian Resources output within 169,000-173,000 boe/d.

The Zacks Consensus Estimate for first-quarter average daily production is pegged at 601,000 boe/d, reflecting year-over-year growth of 2.9%. This is within Occidental Petroleum’s guided range.

First-quarter production of the company will be adversely impacted by the January freezing weather, which lowered output by 2,000 boe/d.

The Zacks Consensus Estimate for total revenues and earnings for the quarter under review stands at $3,696 million and 71 cents, respectively, reflecting growth of 24.1% and 373.3% from the year-ago reported quarter.

 

Earnings Whisper

Our proven model shows that Occidental Petroleum is unlikely to beat estimates in the to-be-reported 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 not the case here as you will see below.

Zacks ESP: Occidental Petroleum has an Earnings ESP of 0.00%.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 #3 when combined with the 0.00% ESP, 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
                    
Occidental Petroleum does not have the right parameters to come up with an earnings surprise in the first quarter. However, we have some players in the Zacks Oil and Energy sector tthat have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Evolution Petroleum Corporation, Inc. (EPM - Free Report) has an Earnings ESP of +12.00% and a Zacks Rank #2. It is expected to report third-quarter fiscal 2018 earnings on May 14. You can see the complete list of today’s Zacks #1 Rank stocks here.

Rex Energy Corporation has an Earnings ESP of +30.16% and a Zacks Rank #2. It is expected to report first-quarter 2018 earnings on May 8.

Enbridge Inc. (ENB - Free Report) has an Earnings ESP of +5.88% and a Zacks Rank #3. It is expected to report first-quarter 2018 earnings on May 10.

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