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Is a Beat in the Cards for Occidental (OXY) in Q2 Earnings?

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We expect Occidental Petroleum Corporation (OXY - Free Report) to beat second-quarter 2018 earnings estimates when it reports after the market closes on Aug 8. In the first quarter, the oil and gas company delivered a positive earnings surprise of 29.58%.

Why a Likely Positive Surprise?

Our proven model shows that Occidental Petroleum is likely to beat estimates in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen and Occidental Petroleum precisely has this perfect combination.

Earnings ESP: Occidental Petroleum has an Earnings ESP of +0.64%. A positive ESP indicates a likely earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Occidental Petroleum currently has a Zacks Rank #2, which increases the predictive power of ESP. Therefore, the company’s bullish Zacks Rank combined with a favorable ESP value makes us significantly confident about an earnings beat this reporting cycle.

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Occidental Petroleum Corporation Price and EPS Surprise

Factors at Play

Occidental Petroleum expects second-quarter production to be in the range of 628,000-648,000 barrels of oil equivalent per day (boe/d) and Permian Resources output within 188,000-198,000 boe/d. This raised production guidance provided by the company is based on the expected commissioning of two large facilities in New Mexico.

However, the upped production projection in the second quarter will be offset to some extent on account of planned downtime in Qatar facility, which will lower the output by 6,000 boe/d.

The Zacks Consensus Estimate for second-quarter average daily production is pegged at 646,000 boe/d, reflecting year-over-year growth of 7.5%. The figure is within the Occidental Petroleum’s guided range.

The consensus mark for total revenues and earnings in the quarter under review stands at $4,008 million and $1.25 per share, respectively, reflecting a surge of 11.2% and 733.3% each, from the year-ago quarter’s tally.

Stocks to Consider

We have some other players worth considering in the Zacks Oil and Energy sector with the right combination of elements to beat on earnings this time around.

Nustar Energy L.P. (NS - Free Report) has an Earnings ESP of +29.29% and a Zacks Rank #1. It is expected to report second-quarter 2018 earnings on Aug 7. You can see the complete list of today’s Zacks #1 Rank stocks here.

Penn Virginia Corporation (PVAC - Free Report) has an Earnings ESP of +17.21% and a Zacks Rank of 1. It is expected to report second-quarter 2018 earnings on Aug 7.

Sunrun Inc. (RUN - Free Report) has an Earnings ESP of +18.84% and is a Zacks #1 Ranked stock. It is expected to report second-quarter 2018 earnings on Aug 9.

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