Last quarter, ConocoPhillips posted a negative earnings surprise of 3.23%. However, during the last four quarters, the company’s positive average earnings surprise was 5.74%. Let’s see how things are shaping up for this announcement. Factors to Consider this Quarter ConocoPhillips expects first-quarter 2015 production from continuing operation of 1,570−1,610 million barrels of oil equivalent per day (MBOED), higher than 1,540 MBOED in full-year 2014. Although production will likely increase, the pricing environment of both crude and natural gas was weak during the entire quarter. Crude price hovered around $45 to $54 per barrel, while natural gas traded much below the commodity’s marginal cost of production − usually $5–$6 per MMBtu − in North America. Considering both positive and the negative events, we need to wait and see whether the company’s earnings beat the Zacks Consensus Estimate. Earnings Whispers? Our proven model does not conclusively show that ConocoPhillips is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below. Zacks ESP: ConocoPhillips currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 17 cents per share. Zacks Rank: ConocoPhillips carries a Zacks Rank #3 (Hold). Though this increases the predictive power, a 0.00% ESP makes surprise prediction difficult. We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions. Stocks to Consider Some stocks in the energy sector that have both a positive Earnings ESP and a favorable Zacks Rank are: Suncor Energy Inc. SU with an Earnings ESP of +400.00% and a Zacks Rank #2 (Buy). The company is expected to release earnings on Apr 29. Cenovus Energy Inc. CVE with an Earnings ESP of +36.36% and a Zacks Rank #2. The company is slated to release earnings on Apr 29. Marathon Petroleum Corporation MPC with an Earnings ESP of +2.13% and a Zacks Rank #2. The company is slated to release earnings on Apr 30. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CONOCOPHILLIPS (COP): Free Stock Analysis Report SUNCOR ENERGY (SU): Free Stock Analysis Report CENOVUS ENERGY (CVE): Free Stock Analysis Report MARATHON PETROL (MPC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
|