ONEOK Inc. (OKE) will release fourth-quarter 2014 financial results after the market closes on Feb 23, 2015. In the prior quarter, the company reported a positive earnings surprise of 5.26%. Let’s see how things are shaping up for the final quarter of 2014.
Factors to Consider
ONEOK Inc. is the sole general partner of ONEOK Partners, L.P. (OKS) with a 38.3% ownership as of Sep 30, 2014. The partnership is engaged in natural gas gathering and processing, natural gas liquids and natural gas pipelines.
ONEOK provides managerial support as well as resources to ONEOK Partners to carry out the partnership’s operations. Successfully executed projects enhance cash distribution leading to greater financial flexibility for ONEOK.
However, the decline in the commodity prices is likely to have a negative impact on the net realized prices of natural gas, NGLs and condensate. As a consequence, margins are expected to be under pressure.
Earnings Whispers
Our proven model does not conclusively show that ONEOK Inc. is likely to beat earnings estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here.
Zacks ESP: This is because the Most Accurate estimate stands at 36 cents while the Zacks Consensus Estimate is 37 cents, resulting in -2.70% ESP.
Zacks Rank: ONEOK Inc.’s Zacks Rank #4 (Sell) when combined with a -2.70% ESP indicates a high probability that the company will miss earnings estimates this quarter.
We particularly caution against stocks with Zacks Rank #4 and 5 going into the earnings season.
Stocks to Consider
Here are some firms in the same sector worth considering as our model shows they have the right combination of elements to post an earnings beat this quarter.
Holly Energy Partners L.P (HEP) has an earnings ESP of +7.90% and carries a Zacks Rank #2.
Western Refining Logistics, LP (WNRL) has an earnings ESP of +10.53% and carries a Zacks Rank #3.
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 ONEOK PARTNERS (OKS): Free Stock Analysis Report ONEOK INC (OKE): Free Stock Analysis Report HOLLY EGY PTNRS (HEP): Free Stock Analysis Report WESTERN REF LOG (WNRL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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