EOG Resources, Inc. EOG is set to release second-quarter 2015 financial results after the closing bell on Aug 6.
Last quarter, the company’s earnings of 3 cents per share decreased from $1.40 earned in the year-ago quarter. This was due to weak commodity prices. The results however came above the Zacks Consensus Estimate of 1 cent. Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that EOG Resources is likely to beat earnings because it has the perfect combination of two key ingredients.
Zacks ESP: Earnings ESP for the company is at +100.00%, as the Most Accurate estimate is 10 cents while the Zacks Consensus Estimate is pegged at 5 cents. A favorable Zacks ESP serves as a meaningful indicator of a likely positive earnings surprise.
Zacks Rank: EOG Resources currently carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of EOG Resources’ Zacks Rank #3 and +100.00% ESP makes us reasonably confident of an earnings beat.
What's Driving the Better-than-Expected Earnings?
EOG Resources’ large portfolio of high-return projects and strong technical competence are its key long-term drivers. Increased production volumes supported results in the last reported quarter and the trend is expected to continue.
Its guidance for second-quarter total production is between 538 MBoe/d and 566.1 MBoe/d, with 72–77 MBbls/d of NGL and 1,027–1,283 MMcf/d of gas. As such, we view EOG as a favorable pick.
Overall, the company’s activities during the April–June period were adequate to win analysts’ confidence. The Zacks Consensus Estimate for the second quarter increased to 5 cents from 2 cents per share over the last 30 days.
Other Stocks That Warrant a Look
Here are some other companies in the basic materials sector you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
CONE Midstream Partners L.P. CNNX has an Earnings ESP of +12.50% and a Zacks Rank #2. The partnership is slated to release earnings on Aug 5.
Calumet Specialty Products Partners L.P. CLMT has Earnings ESP of +15.79% and a Zacks Rank #2. The partnership is likely to release earnings on Aug 5.
Seadrill Partners LLC SDLP has an Earnings ESP of +12.28% and a Zacks Rank #2. The partnership is slated to release earnings on Aug 26.
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 >>
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
Be the first to comment