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WPX Energy (WPX) to Report Q4 Earnings: What's in Store?

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WPX Energy, Inc. is scheduled to release fourth-quarter 2017 results on Feb 21, after the closing bell. The company delivered a positive surprise in the trailing four quarters with an average beat of 13.31%.

Let’s see, how things are shaping up prior to this announcement.

Factors to Consider

The Zacks Consensus Estimate for oil production for the fourth quarter is pegged at 75,000 barrels per day, reflecting a sequential increase of 15.4% and year-over-year growth of nearly 67.8%. This clearly indicates the company’s focus to improve oil production volumes.

During the fourth quarter, the company entered into a contract to sell portions of its legacy natural gas position in the San Juan Basin. The company anticipates total production in 2017 to be 106,000-117,000 thousand barrels of oil equivalents per day (Mboe/d), which includes the impact of San Juan divestitures.

The Zacks Consensus Estimate for total revenues of the company is pegged at $411 million, reflecting sequential growth of 83.5%. The Zacks Consensus Estimate for the fourth quarter is pegged at negative earnings of 8 cents per share, much narrower than the year-ago quarter’s negative earnings of 16 cents.

The company is expected to gain from the increasing focus on oil and improving commodity prices. In addition, WPX Energy has hedged a substantial volume of its oil and natural gas production to protect it from fluctuating prices.

WPX Energy, Inc. Price and EPS Surprise
 

WPX Energy, Inc. Price and EPS Surprise | WPX Energy, Inc. Quote

 

Earnings Whispers

Our proven model does not show that WPX Energy is going to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP  and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.

Zacks ESP: WPX Energy has an Earnings ESP of -1.82%. The Zacks Consensus Estimate is pegged at a loss of 8 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter..

Zacks Rank: Though WPX Energy’s Zacks Rank #3 increases the predictive power of the ESP, the company needs a positive ESP to be confident about an earnings suprise. Hence, this combination leaves surprise prediction inconcluisve.

We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few companies from the same industry that have the right combination of elements to beat on earnings this quarter.

EOG Resources, Inc. (EOG - Free Report) is expected to report fourth-quarter 2017 earnings  on Feb 27. It has an Earnings ESP of +3.61% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot Oil & Gas Corporation has an Earnings ESP of +7.44% and a Zacks Rank #1. It is slated to report fourth-quarter 2017 earnings on Feb 23.

Continental Resources, Inc. has an Earnings ESP of +1.86% and a Zacks Rank #1. It is scheduled to report fourth-quarter 2017 earnings on Feb 21.

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