Global large-cap energy equipment maker, National Oilwell Varco (NOV) is scheduled to report first-quarter 2014 results on Apr 28, before the opening bell.
Why a Likely Positive Surprise?
Our proven model shows that National Oilwell Varco has the right combination of two key factors to beat earnings.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate of $1.40 and Zacks Consensus Estimate of $1.39, stands at +0.72%. This is a meaningful and leading indicator of a likely positive earnings surprise for shares.
Zacks Rank: National Oilwell has a Zacks Rank #3 (Hold). Note that stocks with Zacks Ranks #1 (Strong Buy), 2 (Buy) and 3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of National Oilwell’s Zacks Rank #3 (Hold) and +0.72% ESP makes us confident of a positive earnings beat.
What Will Drive the Better-than-Expected Earnings?
National Oilwell has been a consistent growth story in the oilfield machinery & equipment sector with its stock climbing over 23% in the past one year. Additionally, National Oilwell delivered positive earnings surprises in two out of four trailing quarters. The company has an average earnings beat of 1.79%.
National Oilwell is one of the biggest manufacturers of drilling equipment in the world with an impressive business model. Continued robust backlog, strong financials and strength in its international operations could act as growth drivers in the company’s upcoming results.
The Houston, TX-based company has recently restructured its segments. With the spin-off of the distribution business and the restructuring move, National Oilwell could be well on its way to unlock untapped value.
The company mentioned during its fourth quarter release that it got a good start in 2014 with demand being robust. Further, an increase in activity in the Canadian market could give a boost to the company’s revenues.
Other Stocks to Consider
National Oilwell is not the only firm looking up this earnings season. We also see likely earnings beat coming from these 3 companies from the energy sector:
Suncor Energy Inc. (SU), earnings ESP of +1.11% and Zacks Rank #2. The company is slated to release first quarter earnings on Apr 28.
Canadian Natural Resources Ltd (CNQ), earnings ESP of +8.22% and Zacks Rank #2. The company is expected to release earnings after the closing bell on May 8.
Abraxas Petroleum Corp. (AXAS), earnings ESP of +20.00% and Zacks Rank #2. The company is scheduled to release earnings on May 8.
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