Independent upstream energy firm, Whiting Petroleum Corp. (WLL) is set to release third-quarter 2014 financial results after the closing bell on Oct 29.
Last quarter, the company delivered an impressive 10.24% positive earnings surprise. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Like any other energy player − primarily involved in exploration, development and production of crude oil − the fate of Whiting Petroleum’s business is directly correlated with crude prices. Let’s have a look at the crude pricing environment during the third quarter.
Crude traded significantly below than the psychological threshold of $100 per barrel for the most of the July-September period. We believe that the unfavourable crude pricing scenario might weigh on the company’s bottom line.
Earnings Whispers
Our proven model does not conclusively show that Whiting Petroleum 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 indicates an ESP of -3.20% for Whiting Petroleum as the Most Accurate estimate stands at $1.21 while the Zacks Consensus Estimate is pegged higher at $1.25.
Zacks Rank: Whiting Petroleum has a Zacks Rank #3 (Hold). Although this increases our predictive power, we need to have a positive ESP to be confident of an earnings surprise.
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.
Cobalt International Energy Inc. (CIE), with Earnings ESP of +11.11% and a Zacks Rank #1 (Strong Buy).
Delek Logistics Partners, LP (DKL), with Earnings ESP of +5.56% and a Zacks Rank #1.
Alon USA Energy Inc. (ALJ), with Earnings ESP of +1.75% and a Zacks Rank #2 (Buy).
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