Emerge Energy Services LP (EMES) is set to release third-quarter 2014 financial results after the closing bell on Oct 30.
The partnership has beaten the Zacks Consensus Estimate in three of the trailing four quarters and has an average positive surprise of 2.79%. In the last reported quarter, Emerge Energy Services beat the Zacks Consensus Estimate by a penny on strong results from both its business segments. Let’s see how things are shaping up for this announcement.
Factors to Consider in the Past Quarter
The sluggish crude and natural gas prices have remained a major source of concern for most energy sector players. This tumble in prices is likely to result in lower activity, translating into less work for the likes of Emerge Energy Services.
In the conference call after its second-quarter results, the partnership mentioned that the strong quarterly performance was mainly attributable to optimum capacity utilization by its assets. As a result, it expects third-quarter results to remain almost flat sequentially, without any significant capacity addition.
However, the partnership has several projects in the pipeline that should improve its capacity in the near term. Additionally, Emerge Energy Services’ fuel processing and distribution business as well as the fracking sand business has witnessed strong growth that has aided the partnership to report good numbers in terms of earnings.
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 elaborated below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently 0.00%.
Zacks Rank: Emerge Energy Services has a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (#4 and 5) from going into the earnings announcement.
Promising Stocks
Here are some other companies from the energy sector for investors to consider, that, according to our model have the right combination of elements to post an earnings beat this quarter:
Murphy USA Inc. (MUSA) has an Earnings ESP of +20.51% and a Zacks Rank #1 (Strong Buy).
Cobalt International Energy, Inc. (CIE) has Earnings ESP of +11.11% and a Zacks Rank #1.
Delek Logistics Partners, LP (DKL) has Earnings ESP of +5.56% and a Zacks Rank #1.
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