Pioneer Natural (PXD): What Awaits This Earnings Season?

Independent oil and gas exploration and production company, Pioneer Natural Resources Company (NYSE:PXD) is expected to report second-quarter 2016 results on Jul 27. Let’s see how things are shaping up prior to the announcement.

Last quarter, the company incurred adjusted loss of 64 cents per share, narrower than the Zacks Consensus Estimate of a loss of 73 cents. This comes to a positive earnings surprise of 12.33%. Moreover, the company outpaced the Zacks Consensus Estimate in each of the last four quarters.

PIONEER NAT RES Price and EPS Surprise

PIONEER NAT RES Price and EPS Surprise | PIONEER NAT RES Quote

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

Earnings Whispers

Our proven model shows that Pioneer Natural is likely to beat on earnings because it has the right combination of the two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +19.44%. This is because the Most Accurate estimate stands at a loss of 29 cents, while the Zacks Consensus Estimate is pegged at a wider loss of 36 cents. This is a meaningful indicator of a likely positive earnings surprise.

Zacks Rank: Pioneer Natural carries a Zacks Rank #2 (Buy), which when combined with a positive Earnings ESP, makes us confident about an earnings beat.

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

What is Driving the Better-than-Expected Earnings?

Pioneer Natural Resources’ oil-weighted reserves base and a large drilling inventory saw momentum in the April–June period. The pricing environment for crude, in contrast to the previous few quarters, advanced more than 26% sequentially during the said period. West Texas Intermediate (WTI) crude futures during the second quarter hovered mostly between $40 and $50 per barrel.

As a result, Pioneer now expects second-quarter production to average 224–229 thousand barrels of oil equivalent per day (MBOE/d).

Overall activities of Pioneer Natural Resources’ were adequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the second quarter improved to loss of 36 cents from loss of 39 cents per share over the last seven days.

Stocks to Consider

Here are some other companies to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter.

Anadarko Petroleum Corporation (NYSE:APC) has an Earnings ESP of +1.30% and a Zacks Rank #2. The company is likely to release earnings results on Jul 26.

Legacy Reserves LP (NASDAQ:LGCY) has an Earnings ESP of +31.58% and a Zacks Rank #1. The partnership is expected to release earnings results on Aug 3.

Noble Energy Inc. (NYSE:NBL) has an Earnings ESP of +6.25% and a Zacks Rank #2. The company is expected to release earnings results on Aug 3.