Noble Energy Inc. (NBL - Analyst Report) is scheduled to release its fourth quarter 2012 financial results before the market bell on Feb 7, 2013. In the last reported quarter, the exploration and production company posted a negative earnings surprise of 10.58%. Let’s see how things are shaping up at Noble Energy prior to this announcement.
Factors to Consider This Quarter
Noble Energy is expected to ride high on the back of rising production volume from its Marcellus, Wattenburg and Denver/Julesburg (DJ) Basin plays. Outside the US, the company’s Noa and Pinnacle blocks in offshore Israel came into operation in the third quarter which will add to sales, going forward.
However, the impact of Hurricane Sandy led to disruption in the company’s deepwater Gulf of Mexico operations which could somewhat offset sales. Also, political disturbances in Africa might be a source of concern for the company given its major operations in this region.
Our proven model does not conclusively show that Noble Energy is likely to beat earnings this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here.
Negative Zacks ESP: This is because the Most Accurate estimate stands at $1.08 per share while the Zacks Consensus Estimate is higher at $1.11, resulting in -2.70% ESP.
Zacks Rank #2 (Buy): Noble Energy’s Zacks Rank #2 when combined with negative ESP makes surprise prediction difficult. We caution investors against the stock going into the earnings announcement, as a negative Zacks ESP lowers the possibility of an earnings surprise.
Other Stocks to Consider
Other companies you may want to consider on the basis of our model which shows that they have the right combination of elements to post an earnings beat this quarter are as follows:
BreitBurn Energy Partners L.P. has earnings ESP of +4.35% and carries a Zacks Rank #1 (Strong Buy).
Rex Energy Corporation (REXX - Snapshot Report) has earnings ESP of +25.0% and carries a Zacks Rank #2 (Buy).
SandRidge Permian Trust has earnings ESP of +13.64% and carries a Zacks Rank #2 (Buy).