U.S. energy major Chevron Corp. (CVX) is expected to report fourth-quarter 2014 results on Jan 30, 2015.
Last quarter, Chevron had delivered a positive earnings surprise of 16.14%. Moreover, the integrated energy player posted an average positive earnings surprise of 5.06% for the past four quarters. Let’s see how things are shaping up for this announcement.
Factors to Consider this Quarter
The upstream business of the integrated firm is likely to be hampered by the lackluster oil pricing environment during the entire fourth quarter. Starting from $90.74 per barrel on Oct 1, 2014, the West Texas Intermediate (WTI) crude price slid persistently to touch the below $55 per barrel mark in Dec 2014.
Since Chevron generates the majority of earnings from oil exploration and production activities, its fourth quarter profit margin is anticipated to get impacted.
Earnings Whispers?
Our proven model does not conclusively show that Chevronis likely to beat earnings 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. That is not the case here, as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.67. Hence, the Earnings ESP of 0.00% makes prediction difficult.
Zacks Rank: Chevron carries a Zacks Rank #5 (Strong Sell), which also complicates the forecasting power of ESP.
Stocks to Consider
Here are some companies with the right combination of elements to post an earnings beat this quarter:
Seadrill Partners LLC (SDLP) has an Earnings ESP of +10.53% and a Zacks Rank #2 (Buy). The partnership is expected to release earnings on Feb 26.
Valero Energy Partners LP (VLP) has an Earnings ESP of +3.33% and a Zacks Rank #2. The partnership is slated to release earnings on Feb 5.
Tesoro Corporation (TSO) has an Earnings ESP of +1.40% and a Zacks Rank #2. The company is likely to release earnings on Feb 11.
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