Ensco (ESV) To Post Q1 Earnings: Is A Beat In The Cards?

Ensco plc (NYSE:ESV) , a leading supplier of offshore contract drilling services to the oil and gas industry, is expected to report first-quarter 2017 earnings on Apr 27, before the opening bell.

Last quarter, the company delivered a positive earnings surprise of 80.00%. We note that Ensco surpassed the Zacks Consensus Estimate in three of the preceding four quarters with an average positive surprise of 41.70%.

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

Why a Likely Positive Surprise?

Our proven model shows that Ensco plc is likely to beat earnings 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 +22.22%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank:Ensco plc carries a Zacks Rank #3 (Hold) which when combined with +22.22% ESP, makes us confident about a positive earnings beat.

Note that stocks with Zacks Ranks #1 (Strong Buy), 2 (Buy) or 3 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?

Although crude ended the first quarter of this year 5.8% lower, the pricing environment of commodity prices was much healthier than the year-ago quarter, courtesy of the historical OPEC agreement.

The January–March quarter of this year was favorable for oil exploration and production (E&P) companies. The improved rig count data issued by Baker Hughes Inc. (NYSE:BHI) clearly indicates that more and more of these firms have been gathering to the U.S oil patches.

Ensco provides offshore drilling services to the energy industry all over the world and is expected to get more contracts from the upstream energy players for drilling oil wells.

Also, shares of Ensco outperformed the Zacks categorized Oil & Gas Drilling industry during the first quarter. During the aforesaid period, shares of the company lost 7.9% compared with 15.7% decrease for the broader industry.

Other Stocks to Consider

Chesapeake Energy Corp. (NYSE:CHK) has an Earnings ESP of +5.00% and a Zacks Rank #3. The company is expected to release earnings on May 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

Southwestern Energy Company (NYSE:SWN) has an Earnings ESP of +5.88% and a Zacks Rank #3. The company is expected to release earnings on Apr 27.

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