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WPX Energy (WPX) to Report Q1 Earnings: What's in Store?

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WPX Energy Inc. is scheduled to release first-quarter 2020 results on May 6. In the last reported quarter, the company delivered a negative earnings surprise of 16.7%.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors to Consider

WPX Energy’s first-quarter oil production is anticipated to have benefited from the acquisition of Felix Energy that was completed during the quarter.  The company expects oil production volumes to be 150,000 barrels per day, backed by positive contributions from the buyout of Felix Energy.

The outbreak of novel coronavirus led to unprecedented economic crisis and a slowdown of commercial and industrial activities on a global scale, in turn lowering demand for oil and resulting in a drop in prices. A substantial portion of WPX Energy’s oil production has been hedged. That said, a drop in oil prices is expected to have adversely impacted first-quarter earnings of the company.

It lowered capital expenditure to preserve liquidity and generate free cash flow.

Q1 Expectation

The Zacks Consensus Estimate for first-quarter 2020 total production is pegged at 193,000 barrels of oil equivalent per day, which indicates a 24.5% increase from the year-ago reported figure. Out of the total first-quarter production, nearly 62.2% is expected to be oil.

WPX Energy, Inc. Price and EPS Surprise

WPX Energy, Inc. Price and EPS Surprise

WPX Energy, Inc. price-eps-surprise | WPX Energy, Inc. Quote

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for WPX Energy this time around. The combination of a positive Earnings ESP (which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company’s Earnings ESP is -6.54%.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, WPX Energy carries a Zacks Rank #3.

Stocks to Consider

Here are a few companies worth considering from the same industry that have the right combination of elements to beat on earnings in the upcoming releases.

Devon Energy (DVN - Free Report) is set to release first-quarter results on May 5. It has an Earnings ESP of +6.38% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Apache Corporation (APA - Free Report) is set to release first-quarter results on May 7. It has an Earnings ESP of +1.33% and a Zacks Rank of 3.

Talos Energy (TALO - Free Report) is set to release first-quarter results on May 7. It has an Earnings ESP of +25.00% and a Zacks Rank of 3.

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