Is Emerge Energy Services (EMES) Set To Beat Earnings In Q1?

We expect fracking sand player Emerge Energy Services L.P. (NYSE:EMES) to beat expectations when it reports first-quarter 2017 results before the opening bell on Wednesday, May 3.

In the preceding three-month period, the partnership recorded a negative earnings surprise of 8.45%.

In terms of earnings surprise history, Emerge Energy Services has a dismal record. It missed estimates in each of the last four quarters.

Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Emerge Energy Services is likely to beat earnings in the to-be-reported quarter because it has the right combination of two key ingredients.

Zacks ESP: Earnings ESP for this partnership stands at +14.71%. This is because the Most Accurate Estimate stands at a loss of 29 cents, whereas the Zacks Consensus Estimate is pegged wider at a loss of 34 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Emerge Energy Services carries a Zacks Rank #3 (Hold) which, when combined with a positive ESP, makes us confident of an earnings beat.

Note that stocks with Zacks Ranks #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. On the other hand, the Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

What is Driving the Better-Than-Expected Earnings?

With the frack sand market expected to clock massive growth in 2017, Emerge Energy Services is likely to see a steep rise in total sand volumes sold. Last quarter, the partnership saw its volumes jump 68% sequentially. Accompanied by higher prices, the pure-play frac sand supplier is expected to reap rich rewards.

Emerge Energy Services’ successful initiatives in controlling costs (both fixed and variable) across all aspects of its business will improve its competitive positioning and augment its bottom line.

Other Stocks to Consider

Emerge Energy Services is not the only energy firm looking up this earnings season. Here are some companies from the space which, according to our model, also have the right combination of elements to post earnings beat this quarter:

PBF Logistics L.P. (NYSE:PBFX) has an Earnings ESP of +10.91% and a Zacks Rank #1. The partnership is expected to release earnings results on May 4. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Global Partners L.P. (NYSE:GLP) has an Earnings ESP of +233.33% and a Zacks Rank #1. The partnership is anticipated to release earnings on May 9.

NOW Inc. (NYSE:DNOW) has an Earnings ESP of +17.39% and a Zacks Rank #2. The company is likely to release earnings on May 3.

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