Oil drilling equipment maker, Cameron International Corporation CAM is set to release first-quarter 2015 financial results before the opening bell on Apr 23.
Last quarter, the company had delivered an impressive 11.67% positive earnings surprise. In fact, during the last four quarters, Cameron’s average earnings surprise came at positive 8.72%.
Factors Likely to Influence this Quarter
Being a manufacturer of pressure control equipment − used in onshore, offshore, and subsea applications for oil drilling and production activities – Cameron’s business is positively correlated with crude price.
The oil pricing environment was extremely weak during the entire first quarter as the West Texas Intermediate (WTI) crude price hovered between $45 and $54 per barrel. This was primarily due to plentiful supply of the commodity in the face of lackluster global demand.
The unfavourable pricing scenario of crude compelled the upstream players and drillers to lower their drilling activities. This in turn is expected to hamper the business of the oilfield machinery provider.
Earnings Whispers?
Our proven model does not conclusively show that Cameron is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. This leads to an ESP of -6.76% for Cameron as the Most Accurate estimate stands at 69 cents while the Zacks Consensus Estimate is pegged higher at 74 cents.
Zacks Rank: Cameron has a Zacks Rank #3 (Hold). While this increases the predictive power, the company’s negative ESP complicates our prediction.
Stocks to Consider
Here are some companies to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Marathon Petroleum Corp. MPC has an Earnings ESP of +1.77% and a Zacks Rank #1 (Strong Buy). The company is slated to release earnings on Apr 30.
Suncor Energy Inc. SU has an Earnings ESP of +400.00% and a Zacks Rank #2. The company is slated to release earnings on Apr 29.
Whiting Petroleum Corp. WLL has an Earnings ESP of +6.90% and a Zacks Rank #2 (Buy). The company is slated to release earnings on Apr 29.
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