Back to top

Image: Bigstock

Cimarex (XEC) to Report Q4 Earnings: What's in the Cards?

Read MoreHide Full Article

Cimarex Energy Co. is set to release fourth-quarter 2018 results on Feb 20, after the closing bell.

In the last reported quarter, the upstream energy player posted a positive earnings surprise of 30.9%. Moreover, the company has an average positive earnings surprise of 10.2% for the last four quarters.

Which Way Are Estimates Treading?

Let’s take a look at the estimate revision trend to get a clear picture of analyst opinion on the stock before the earnings release.

The Zacks Consensus Estimate of $1.74 for fourth-quarter 2018 earnings remains the same in the past seven days. The figure reflects a year-over-year improvement of 18.4%    .

Further, the consensus estimate for revenues of $617.7 million shows an increase of 12.1% from the year-ago quarter.

Cimarex Energy Co Price and EPS Surprise

 

Cimarex Energy Co Price and EPS Surprise | Cimarex Energy Co Quote

Factors Likely to Affect Results

Cimarex is a leading explorer and producer of oil and natural gas with prime focus on the prolific Permian and Anadarko.  

The Zacks Consensus Estimate for the company’s fourth-quarter production is pegged at 1,457 million cubic feet of gas equivalent per day (MMcfe/D), indicating a rise from 1,204.4 MMcfe/D in the year-earlier quarter.

The Zacks Consensus Estimate for average realized natural gas price calls for a decline of 19.8% from the year-ago quarter to $2.07 per thousand cubic feet (mcf).

The Zacks Consensus Estimate for average realized oil price however calls for an increase of 5.8% from the year-ago quarter level to $55 per barrel.

The Zacks Consensus Estimate for average realized natural gas liquids price calls for a decline of 14.1% from the year-ago quarter to $22.23 per barrel.  

It is to be noted that among all commodities, the majority of the company’s production comprise natural gas. Although the expected rise in gas equivalent production will support Cimarex’s bottom line, the projected decline in price realization for the commodity is a concern.

Earnings Whispers

Our proven model does not show a beat for Cimarex this earnings season. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.63%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cimarex carries a Zacks Rank #3, which when combined with an Earnings ESP of -0.63%, lowers the possibility of an earnings surprise.     

Conversely, Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.

Stocks to Consider

Here are a few firms that you may want to consider on the basis of our model. These have the right combination of elements to beat estimates this quarter.

Sunoco LP (SUN - Free Report) has an Earnings ESP of +26.89% and a Zacks Rank #2. The partnership is slated to release earnings on Feb 20. You can see the complete list of today’s Zacks #1 Rank stocks here.

C&J Energy Services, Inc. has an Earnings ESP of +26.26% and a Zacks Rank #3. The company is scheduled to release earnings on Feb 21.

Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +1.10% and a Zacks Rank #3. The company is slated to release earnings on Feb 19.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?

From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.

This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.

See Stocks Today >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Sunoco LP (SUN) - free report >>

Diamondback Energy, Inc. (FANG) - free report >>

Published in