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Will ConocoPhillips (COP) Disappoint This Earnings Season?
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Leading exploration and production company, ConocoPhillips (COP - Free Report) is set to release its fourth-quarter 2017 financial results, before the opening bell on Feb 1, 2018.
Last quarter, the company delivered an impressive 77.8% positive earnings surprise on the back of higher oil and natural gas price realizations. The company also came up with a positive average surprise of 152.3% in the last four quarters. Let’s see how things are shaping up for this announcement.
Let’s look at estimate revisions in order to get a clearer picture of analyst opinion on the stock before the earnings release.
The Zacks Consensus Estimate has increased from 40 cents per share for the fourth quarter to 45 cents in the last 30 days. While two firms are bearish on the stock, four firms are bullish. The estimate reflects a year-over-year improvement of about 273.1%.
Factors Likely to Influence this Quarter
The Zacks Consensus Estimate for average sale price of natural gas is $4.70 per thousand cubic feet (Mcf), higher than last quarter’s $4.11 per Mcf and the year-ago quarter’s $3.44 per Mcf. However, the Zacks Consensus Estimate for natural gas production for the fourth quarter has declined to 2,793 million cubic feet per day (Mmcfd) from 2,918 Mmcfd in the last quarter and 3,863 Mmcfd in the year-ago quarter.
The average sales price of natural gas liquids for the fourth quarter is estimated to be $30.20 per barrel, higher than last quarter’s reported price of $23.82 per barrel and $21.82 per barrel in the year-ago quarter. However, production is expected to fall to 94 thousand barrel per day (MBD) from third-quarter production of 95 MBD and the year-ago quarter’s production of 143 MBD.
Average crude oil sales price is expected to be $55 per barrel, higher than third quarter’s $49.39 per barrel and the year-ago quarter’s price of $47.05. Moreover, production of crude oil per day for the fourth quarter is expected to rise to 604 MBD from previous quarter’s 420 MBD and the year-ago quarter’s 596 MBD.
Though we expect average realized prices in the fourth quarter to increase for all the commodities, their production is expected to decrease, except crude oil output. The fall in production can be primarily attributed to the company’s asset sales in 2017. These divestures include the sale of mining operations in Foster Creek Christina Lake oil sands and Western Canada’s Deep Basin gas assets. The company also closed the divesture deals of San Juan asset and Barnett asset in the third quarter of 2017. Hence, it is difficult to conclusively predict the net impact on fourth-quarter results.
Q4 Price Performance
ConocoPhillips gained 9.6% in the fourth quarter compared with 9.4% growth of its industry.
Earnings Whispers
Our proven model does not conclusively show that ConocoPhillipsis 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that 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 -10.30%. While the Most Accurate estimate stands at 40 cents, the Zacks Consensus Estimate is pegged higher at 45 cents.
Zacks Rank: ConocoPhillips has a Zacks Rank #2,which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 (Sell) and 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Houston, TX -based Cabot Oil & Gas Corporation is an independent energy company. Its Earnings ESP is +15.15% and the stock sports a Zacks Rank #1.
Suncor Energy Inc. (SU - Free Report) is a Calgary, Canada based integrated energy company. Its Earnings ESP is +12.44% and it carries a Zacks Rank #1.
Irving, TX-based Pioneer Natural Resources Company is an independent oil and gas exploration and production company. The company has an Earnings ESP of +4.85% and it sports a Zacks Rank #1.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Will ConocoPhillips (COP) Disappoint This Earnings Season?
Leading exploration and production company, ConocoPhillips (COP - Free Report) is set to release its fourth-quarter 2017 financial results, before the opening bell on Feb 1, 2018.
Last quarter, the company delivered an impressive 77.8% positive earnings surprise on the back of higher oil and natural gas price realizations. The company also came up with a positive average surprise of 152.3% in the last four quarters. Let’s see how things are shaping up for this announcement.
ConocoPhillips Price and EPS Surprise
ConocoPhillips Price and EPS Surprise | ConocoPhillips Quote
Which Way Are Estimates Trending?
Let’s look at estimate revisions in order to get a clearer picture of analyst opinion on the stock before the earnings release.
The Zacks Consensus Estimate has increased from 40 cents per share for the fourth quarter to 45 cents in the last 30 days. While two firms are bearish on the stock, four firms are bullish. The estimate reflects a year-over-year improvement of about 273.1%.
Factors Likely to Influence this Quarter
The Zacks Consensus Estimate for average sale price of natural gas is $4.70 per thousand cubic feet (Mcf), higher than last quarter’s $4.11 per Mcf and the year-ago quarter’s $3.44 per Mcf. However, the Zacks Consensus Estimate for natural gas production for the fourth quarter has declined to 2,793 million cubic feet per day (Mmcfd) from 2,918 Mmcfd in the last quarter and 3,863 Mmcfd in the year-ago quarter.
The average sales price of natural gas liquids for the fourth quarter is estimated to be $30.20 per barrel, higher than last quarter’s reported price of $23.82 per barrel and $21.82 per barrel in the year-ago quarter. However, production is expected to fall to 94 thousand barrel per day (MBD) from third-quarter production of 95 MBD and the year-ago quarter’s production of 143 MBD.
Average crude oil sales price is expected to be $55 per barrel, higher than third quarter’s $49.39 per barrel and the year-ago quarter’s price of $47.05. Moreover, production of crude oil per day for the fourth quarter is expected to rise to 604 MBD from previous quarter’s 420 MBD and the year-ago quarter’s 596 MBD.
Though we expect average realized prices in the fourth quarter to increase for all the commodities, their production is expected to decrease, except crude oil output. The fall in production can be primarily attributed to the company’s asset sales in 2017. These divestures include the sale of mining operations in Foster Creek Christina Lake oil sands and Western Canada’s Deep Basin gas assets. The company also closed the divesture deals of San Juan asset and Barnett asset in the third quarter of 2017. Hence, it is difficult to conclusively predict the net impact on fourth-quarter results.
Q4 Price Performance
ConocoPhillips gained 9.6% in the fourth quarter compared with 9.4% growth of its industry.
Earnings Whispers
Our proven model does not conclusively show that ConocoPhillipsis 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that 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 -10.30%. While the Most Accurate estimate stands at 40 cents, the Zacks Consensus Estimate is pegged higher at 45 cents.
Zacks Rank: ConocoPhillips has a Zacks Rank #2,which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 (Sell) and 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Houston, TX -based Cabot Oil & Gas Corporation is an independent energy company. Its Earnings ESP is +15.15% and the stock sports a Zacks Rank #1.
Suncor Energy Inc. (SU - Free Report) is a Calgary, Canada based integrated energy company. Its Earnings ESP is +12.44% and it carries a Zacks Rank #1.
Irving, TX-based Pioneer Natural Resources Company is an independent oil and gas exploration and production company. The company has an Earnings ESP of +4.85% and it sports a Zacks Rank #1.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>