Murphy Oil Corporation MUR will release its first-quarter 2015 financial results after the market closes on Apr 29, 2015. In the previous quarter, the oil and gas company reported a positive earnings surprise of 56%. Let’s see how things are turning out for the first quarter.
Factors to Consider This Quarter
The high quality assets of Murphy Oil in Malaysia and Gulf of Mexico will enable it to produce solid hydrocarbon volumes. Strong exploration activities have helped the company to replenish more than what it produced in the past five years.
However, the significant decline in crude oil prices is making it difficult for Murphy. The supply glut in the global market and demand recovery at a lower-than-expected pace continue to put downward pressure on crude prices.
The softness in oil prices prevailed in the first quarter and is expected to continue for the best part of the year. This might force the company to revise its guidance for 2015.
Earnings Whispers?
Our proven model does not conclusively show that Murphy Oil will 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) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at a loss of 86 cents.
Zacks Rank: Murphy Oil’s Zacks Rank #3, which when combined with a 0.00% ESP, makes an earnings beat unlikely.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks in the same sector you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:
Noble Energy, Inc. NBL has an earnings ESP of +50.0% and a Zacks Rank #3.
Apache Corp. APA has an earnings ESP of +9.84% and a Zacks Rank #3.
Chesapeake Energy Corporation CHK has an earnings ESP of +50.0% and a Zacks Rank #3.
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