Fracking sand player and fuel processor Emerge Energy Services LP EMES is set to release third-quarter 2015 results on Wednesday, Nov 4, before the opening bell.
Last quarter, the partnership had delivered a negative earnings surprise of 13.64%. Moreover, during the last four quarters, Emerge Energy Services’ average earnings surprise came at a negative 8.79%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
The sand mining business of the company produces silica sand that is used by exploration and production companies for hydraulic fracturing activities of oil and gas wells. This operation may have been hampered by low commodity prices in the third quarter.
To support this fact, we note West Texas Intermediate (WTI) crude mostly traded below $50 per barrel in the third quarter. In fact, sometimes the commodity even traded below $40 per barrel. Moreover, the natural gas pricing environment was not favorable.
Earnings Whispers
Our proven model does not conclusively show that Emerge Energy Services 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 is 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 -26.67% for Emerge Energy Services as the Most Accurate estimate stands at a loss of 19 cents while the Zacks Consensus Estimate is pegged narrower at a loss of 15 cents.
Zacks Rank: Emerge Energy Services has a Zacks Rank #4 (Sell). The Sell-rated stocks (#4 or 5) should never be considered going into the announcement of results.
Stocks to Consider
Here are some companies to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.
Natural Gas Services Group Inc. NGS has an Earnings ESP of +11.11% and a Zacks Rank #1 (Strong Buy). The company is anticipated to release earnings results on Nov 5.
Swift Energy Co. SFY has an Earnings ESP of +11.11% and a Zacks Rank #2 (Buy). The company is likely to release earnings results on Nov 5.
Seadrill Partners LLC SDLP has an Earnings ESP of +12.00% and a Zacks Rank #1. The partnership is expected to release earnings results on Nov 25.
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