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Is a Beat in Store for Noble Corp (NE) This Earnings Season?

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Noble Corporation plc (NE - Free Report) is scheduled to release second-quarter 2018 results on Aug 2, after the closing bell.

The offshore drilling contractor beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 5.2%. We expect the company to report a beat this earnings season. 

Noble Corporation Price and EPS Surprise

 

Noble Corporation Price and EPS Surprise | Noble Corporation Quote

Why a Positive Surprise?

Our proven model shows that Noble is likely to beat estimates this quarter as the stock has the right combination of the two key ingredients for this to happen — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Noble has an Earnings ESP of +0.61%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The stock carries a Zacks Rank #3, which increases the predictive power of ESP. The combination of Noble’s favorable Zacks Rank and positive ESP makes us reasonably confident of an earnings beat this season.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors to Consider

For the month of April, May and June of 2018, the average West Texas Intermediate (WTI) crude price was reported at a respective $66.25 per barrel, $69.98 and $67.87 — significantly higher than the year-ago monthly prices of $51.06, $48.48 and $45.18. Price data has been taken from the U.S. Energy Information Administration (EIA).

Over the past three years, the average monthly crude pricing scenario through second-quarter 2018 was the healthiest, thanks to supply concerns emanating from Venezuela and Iran amid a robust domestic economy.

Natural gas has also fared well as the price of the commodity rose almost 8% through the April-to-June quarter of 2018.

The favorable oil and gas prices primarily supported the offshore drilling activities. Through the April-to-June quarter of 2018, the count of offshore rig increased from 12 to 19, per data by Baker Hughes, a GE company .

Other Stocks to Consider

Here are some other firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.

Murphy Oil Corporation (MUR - Free Report) has an Earnings ESP of +5.99% and a Zacks Rank #2. The company is set to report second-quarter results on Aug 8, after the closing bell. You can see the complete list of today’s Zacks #1 Rank stocks here.

Occidental Petroleum Corporation (OXY - Free Report) has an Earnings ESP of +1.75% and a Zacks Rank #2. The firm is expected to release earnings on Aug 8, after the closing bell.

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