Does A Beat Await ConocoPhillips (COP) This Earnings Season?

ConocoPhillips (NYSE:COP) is scheduled to report first-quarter 2018 earnings on Apr 26, before the opening bell.

In the last reported quarter, the upstream energy company posted an earnings surprise of 0.00%. ConocoPhillips has an average positive earnings surprise of 144.45% for the last four quarters. Let’s see how things are shaping up prior to the announcement.

Which Way Are Estimates Treading?

Let’s look at the estimate revision trend in order to get a clear picture of what analysts expect from the company this earnings season.

The Zacks Consensus Estimate for first-quarter earnings of 73 cents has seen two upward revisions and one downward revision by firms in the last 60 days. It reflects a whopping improvement of about 3,750% from the year-ago quarter.

Further, analysts polled by Zacks expect revenues of $8,527 million for the first quarter, up 9.7% from the year-ago quarter.

Factors to Consider

The Zacks Consensus Estimate for average sale price of natural gas is $5.04 per thousand cubic feet (Mcf), higher than last quarter’s $4.59 per Mcf and the year-ago quarter’s $3.84 per Mcf.

The average sales price of natural gas liquids for the first quarter is estimated at $34.16 per barrel, higher than last quarter’s reported price of $32.79 per barrel and $24.87 per barrel in the year-ago quarter. Moreover, production is expected to rise to 92 thousand barrel per day (MBD) from fourth quarter’s 89 MBD.

Average crude oil sales price is expected at $60 per barrel, higher than fourth quarter’s $59 a barrel and the year-ago quarter’s $51. Moreover, production of crude oil per day for the first quarter is expected to rise to 609 MBD from the year-ago quarter’s 601 MBD.

Higher expectations for prices of natural gas, natural gas liquid and crude oil will likely favor the company’s first-quarter earnings.

Price Performance in Q1

During the quarter, ConocoPhillips has outperformed its industry, with the stock rallying 8% against the industry's decline of 1.4%.

Earnings Whispers

Our proven model shows that ConocoPhillips is likely to beat earnings this time because it has the right combination of two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +3.23%. This is because the Most Accurate estimate of 76 cents is higher than the Zacks Consensus Estimate of 73 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ConocoPhillips carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. The combination of ConocoPhillips’ favorable Zacks Rank and Earnings ESP makes us confident about an earnings beat.

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

Other Stocks to Consider

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

Comstock Resources, Inc. (NYSE:CRK) is an oil and gas explorer. The company has an Earnings ESP of +37.34% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Oil States International, Inc. (NYSE:OIS) is a leading oilfield services player. The company has an Earnings ESP of + 32.83% and carries a Zacks Rank #2.

Pioneer Natural Resources Company (NYSE:PXD) is an upstream energy company. The company has an Earnings ESP of +2.15% and carries a Zacks Rank #3.

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