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Can Helix Energy (HLX) Pull a Surprise This Earnings Season?
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Helix Energy Solutions Group, Inc. (HLX - Free Report) is scheduled to report third-quarter 2018 earnings on Oct 22, after the closing bell.
In the preceding three-month period, the Texas, U.S.-based oilfield services player delivered a positive earnings surprise of 100% on the back of crude strength and improved year-over-year performance from its well intervention segment. The company also displays an impressive earnings surprise history, not having missed estimates in each of the four trailing quarters, with an average beat of 66.67%.
The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at 12 cents per share on revenues of $203.6 million. The earnings estimate compares much favorably with the year-ago quarter’s EPS of 2 cents. Notably, the Zacks Consensus Estimate for earnings has remained unchanged over the last 60 days.
Helix Energy Solutions Group, Inc. Price and EPS Surprise
Let’s see how things are shaping up for this announcement.
Factors at Play
Helix Energy is engaged in providing specialty services for offshore drilling industry, which seems to be gaining momentum of late on crude price rally. Average West Texas Intermediate (WTI) crude prices were recorded at $70.98, $68.06 and $70.23 per barrel for the month of July, August and September 2018, respectively, per data from the U.S. Energy Information Administration (EIA). These prices were considerably higher than the year-ago respective prices of $46.63, $48.04 and $49.82. The uptick in oil prices have been prompting exploration companies to boost their investments in the offshore drilling industry, which bodes well for companies like Helix Energy.
While the offshore industry is picking pace, the margins still remain under pressure amid excess capacity. While market conditions in North Sea and Brazil are gaining momentum, the company is bearing the brunt of receding backlogs and weakness in the Gulf of Mexico market. Rig rates in Gulf of Mexico continue to be low amid oversupply and stiff competition, which may limit earnings of the company. The company had already stated during its second-quarter earnings call that the oversupplied condition and pressure on rates are not going to abate anytime soon.
Although the company expects an uptick in the revenues from its well intervention services in 2018, it does not anticipate much improvement from its robotics unit. Helix Energy forecasts its top line for well intervention services in the band of $530-$565 million as against $460 million generated in 2017. Robotics’ segment revenues are anticipated within the range of $140-$160 million, representing a nominal decrease of 2% at the midpoint from the 2017 level.
Overall, while we expect the company to benefit from the improved conditions of the market in the United Kingdom, weakness in GoM activities can impact total earnings.
Earnings Whispers
Our proven model does not conclusively show that Helix Energy will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. That is not the case here as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate Estimate and Consensus Estimate are both pegged at 12 cents.
Zacks Rank: Helix Energy currently carries a Zacks Rank #2. Though a Zacks Rank #2 increases the predictive power of ESP, an ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stock to Consider
Though an earnings beat looks uncertain for Helix Energy, here are a few firms from the same industry that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter.
TechnipFMC plc (FTI - Free Report) has an Earnings ESP of +1.69% and a Zacks Rank #3. The company is anticipated to unveil its third-quarter results on Oct 24.
Baker Hughes, a GE company has an Earnings ESP of +2.3% and a Zacks Rank #3. The company is set to report its third-quarter results on Oct 30.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Can Helix Energy (HLX) Pull a Surprise This Earnings Season?
Helix Energy Solutions Group, Inc. (HLX - Free Report) is scheduled to report third-quarter 2018 earnings on Oct 22, after the closing bell.
In the preceding three-month period, the Texas, U.S.-based oilfield services player delivered a positive earnings surprise of 100% on the back of crude strength and improved year-over-year performance from its well intervention segment. The company also displays an impressive earnings surprise history, not having missed estimates in each of the four trailing quarters, with an average beat of 66.67%.
The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at 12 cents per share on revenues of $203.6 million. The earnings estimate compares much favorably with the year-ago quarter’s EPS of 2 cents. Notably, the Zacks Consensus Estimate for earnings has remained unchanged over the last 60 days.
Helix Energy Solutions Group, Inc. Price and EPS Surprise
Helix Energy Solutions Group, Inc. Price and EPS Surprise | Helix Energy Solutions Group, Inc. Quote
Let’s see how things are shaping up for this announcement.
Factors at Play
Helix Energy is engaged in providing specialty services for offshore drilling industry, which seems to be gaining momentum of late on crude price rally. Average West Texas Intermediate (WTI) crude prices were recorded at $70.98, $68.06 and $70.23 per barrel for the month of July, August and September 2018, respectively, per data from the U.S. Energy Information Administration (EIA). These prices were considerably higher than the year-ago respective prices of $46.63, $48.04 and $49.82. The uptick in oil prices have been prompting exploration companies to boost their investments in the offshore drilling industry, which bodes well for companies like Helix Energy.
While the offshore industry is picking pace, the margins still remain under pressure amid excess capacity. While market conditions in North Sea and Brazil are gaining momentum, the company is bearing the brunt of receding backlogs and weakness in the Gulf of Mexico market. Rig rates in Gulf of Mexico continue to be low amid oversupply and stiff competition, which may limit earnings of the company. The company had already stated during its second-quarter earnings call that the oversupplied condition and pressure on rates are not going to abate anytime soon.
Although the company expects an uptick in the revenues from its well intervention services in 2018, it does not anticipate much improvement from its robotics unit. Helix Energy forecasts its top line for well intervention services in the band of $530-$565 million as against $460 million generated in 2017. Robotics’ segment revenues are anticipated within the range of $140-$160 million, representing a nominal decrease of 2% at the midpoint from the 2017 level.
Overall, while we expect the company to benefit from the improved conditions of the market in the United Kingdom, weakness in GoM activities can impact total earnings.
Earnings Whispers
Our proven model does not conclusively show that Helix Energy will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. That is not the case here as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate Estimate and Consensus Estimate are both pegged at 12 cents.
Zacks Rank: Helix Energy currently carries a Zacks Rank #2. Though a Zacks Rank #2 increases the predictive power of ESP, an ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stock to Consider
Though an earnings beat looks uncertain for Helix Energy, here are a few firms from the same industry that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter.
Oceaneering International, Inc. (OII - Free Report) has an Earnings ESP of +4.00% and a Zacks Rank #3. The firm is expected to release its third quarter earnings on Oct 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
TechnipFMC plc (FTI - Free Report) has an Earnings ESP of +1.69% and a Zacks Rank #3. The company is anticipated to unveil its third-quarter results on Oct 24.
Baker Hughes, a GE company has an Earnings ESP of +2.3% and a Zacks Rank #3. The company is set to report its third-quarter results on Oct 30.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>