Natural Resource Partners L.P. NRP will release third-quarter 2015 financial results before the market opens on Nov 5, 2015. In the previous quarter, the partnership reported a positive earnings surprise of 55.56%. On an average, the partnership has posted a 3.34% positive earnings surprise in the last four quarters. Let’s see how things are turning out for the upcoming quarter.
Factors at Play
Proposals for curbing carbon emissions along with increasing usage of natural gas are affecting the demand for coal in the energy sector. Furthermore, the partnership’s high operational expenses are a major cause of concern.
Coal is being increasingly replaced by natural gas for power production due to the latter’s clean burning nature and cheaper cost. This is impacting the partnership’s royalty revenue from its thermal coal assets. Further, declining coal prices will depress the margins of Natural Resource’s lessees, so much so they might find it difficult to pay the royalty to the partnership.
Earnings Whispers
Our proven model does not conclusively show that Natural Resource Partners is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The ESP for the stock is currently 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 13 cents.
Zacks Rank: Natural Resource Partners carries a Zacks Rank #2 (Buy). Though a favorable Zacks Rank increases the predictive power of the ESP, a 0.00% ESP makes a surprise prediction uncertain this season.
We note that Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:
Alliant Energy Corporation LNT has an Earnings ESP of +3.16% and a Zacks Rank #3. It will report its quarterly result on Nov 5, 2015 after market closes.
WEC Energy Group, Inc. WEC has an Earnings ESP of +3.39% and a Zacks Rank #3. The company is scheduled to report its quarterly result before the market opens on Nov 4, 2015.
Duke Energy Corporation DUK has an Earnings ESP of +0.66% and a Zacks Rank #3. The company is scheduled to report its quarterly result before the market opens on Nov 5, 2015.
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