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SilverBow (SBOW) Q4 Earnings Coming Up: What's in the Cards?

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SilverBow Resources, Inc. is set to release fourth-quarter 2018 results on Feb 27, after the closing bell.

In the last reported quarter, the upstream energy player posted a negative earnings surprise of 51.6%. Moreover, the company has average negative earnings surprise of 33.7% 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 $1.90 for fourth-quarter 2018 earnings remained the same over the past seven days. The figure reflects a year-over-year decline of 5%.

Further, the consensus estimate for revenues of $78.6 million shows an increase of 33.9% from the year-ago quarter.

Factors Likely to Affect Results

SilverBow is a leading explorer and producer of natural gas and oil in the Eagle Ford shale play. With decades-long expertise in the prolific shale acres, the company has successfully minimized operating expenses and has been experiencing economies of scale.

With natural gas accounting for more than 80% of total production, the company’s fate is highly dependent on the commodity pricing scenario. Per the U.S. Energy Information Administration, the average monthly Henry Hub natural gas spot prices traded at $3.28 per Million Btu, $4.09 per Million Btu and $4.04 per Million Btu for the respective months of the December quarter of 2018, higher than the respective year-ago comparable prices of $2.88, $3.01 and $2.82. The favorable natural gas pricing is likely to support the upstream energy firm’s quarterly results.

Production outlook also seems favorable as SilverBow projects daily fourth-quarter 2018 production volumes between 203 and 233 million cubic feet of gas equivalent (MMcfe), higher than the year-ago 177 MMcfe.   

Earnings Whispers

Our proven model does not show a beat for SilverBow 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 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: SilverBow carries a Zacks Rank #3, which when combined with an Earnings ESP of 0.00%, 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.

Par Pacific Holdings, Inc. (PARR - Free Report) has a Zacks Rank #2 and Earnings ESP of +18.87%. The company is scheduled to report quarterly earnings on Mar 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cheniere Energy Inc (LNG - Free Report) has Earnings ESP of + 23.18% and a Zacks Rank #3. The company is scheduled to release quarterly results on Feb 26.

Southwestern Energy Company has Earnings ESP of +6.06% and a Zacks Rank #3. The company is slated to release results on Feb 28.

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