Newfield Exploration (NFX) Q1 Earnings: Is A Beat In Store?

Upstream energy player Newfield Exploration Co. (NYSE:NFX) is set to release first-quarter 2017 financial results after the closing bell on May 2.

Last quarter, the company reported earnings of 49 cents per share that beat the Zacks Consensus Estimate of 38 cents. The quarterly earnings also increased from year-earlier quarter earnings of 30 cents per share. Let’s see how things are shaping up for this announcement.

Newfield Exploration Company Price and EPS Surprise

Newfield Exploration Company Price and EPS Surprise | Newfield Exploration Company Quote

Earnings Whispers

Our proven model shows that Newfield Exploration is likely to beat on 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 +4.65%. This is because the Most Accurate estimate stands at 45 cents, while the Zacks Consensus Estimate is pegged at 43 cents. This is very meaningful and a 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: Newfield Exploration carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating on earnings. The combination of Newfield Exploration’s favorable Zacks Rank and a positive Earnings ESP makes us confident about an earnings beat.

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

Factors Likely to Influence this Quarter

OPEC’s historical accord to curb oil production amid an oversupplied commodity market led to the recovery oil prices. Even non-OPEC members like Russia decided to cut output for the first time in 15 years. Undoubtedly, this was a major positive for upstream energy players like Newfield Exploration as these firms were able to earn more cash flows after selling crude at higher prices. This is likely to boost the company’s first-quarter earnings.

Overall, the first quarter was quite favorable for oil Exploration & Production companies. In fact, the improved rig count data issued by Baker Hughes Inc. (BHI) indicates that these firms continued to gather to the oil patches.

Share Price Movement

We also note that Newfield shares have outperformed the Zacks categorized Oil & Gas-U.S Exploration & Production industry in the last three months. During the aforesaid period, the company’s shares lost 11.1% as against 11.6% decline for the broader industry.

Other Stocks to Consider

Newfield Exploration is not the only company looking up this earnings season. Here are some companies from the energy space that according to our model have the right combination of elements to post an earnings beat this quarter:

Tallgrass Energy GP, LP (NYSE:TEGP) is expected to release earnings on May 3. The partnership has an Earnings ESP of +5.56% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

Cimarex Energy Co. (NYSE:XEC) has an Earnings ESP of +1.18% and a Zacks Rank #3. The partnership is expected to release earnings on May 8.

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