Occidental Petroleum Corporation OXY is slated to report its first-quarter 2015 results before the opening bell on May 6, 2015. Last quarter, the oil and gas company posted a positive earnings surprise of 5.88%. Let’s see how things are turning out for the first quarter.
Factors Affecting This Quarter
Los Angeles, CA-based, Occidental Petroleum has a good mix of assets and continues to expand its reserves. The company is also currently repositioning itself through asset monetization and divestments to create a portfolio of low-risk and long reserve-life properties that will provide steady production growth.
Toward the end of 2014, Occidental Petroleum completed the separation of its Californian operations and formed a standalone entity. This company is currently aiming to focus on its Permian business and deploy resources in lucrative projects that sync well with its long-term goal.
However, the oil supply glut due to higher production in the U.S. remains a major overhang on oil prices. This could adversely impact Occidental Petroleum’s financial performance this quarter.
Earnings Whispers?
Our proven model does not conclusively show that Occidental Petroleum 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: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -100.00%. This is because the Most Accurate estimate is pegged at breakeven while the Zacks Consensus Estimate stands at earnings of 2 cents.
Zacks Rank: Occidental Petroleum’s Zacks Rank #3, which when combined with a negative ESP, makes an earnings beat unlikely.
We caution against stocks with a Zacks Rank #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:
Atlas Resource Partners, L.P. ARP has an earnings ESP of +68.75% and a Zacks Rank #3.
Chesapeake Energy Corporation CHK has an earnings ESP of +50.00% and a Zacks Rank #3.
Devon Energy Corporation DVN has an earnings ESP of +7.69% and a Zacks Rank #3.
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