Oil Stock Q2 Earnings To Watch For On Aug 8: EGN, VET & More

We have seen the peak of the second-quarter earnings season this week, with numbers flowing in from as many as 1000 companies. As of Aug 4, 414 members of the S&P 500 index reported their quarterly results.

In the energy space, the second quarter brought back hopes for oil that fell to its 12-year low of $26.21 in February. Subsequently, supply outages around the globe pushed up the price of the commodity by almost 90%, taking it past the $50 per barrel mark. However, per the Earnings Outlook report, the energy sector remains bearish as it is expected to register a massive 79.4% year-over-year decline in earnings due to a 26% plunge in revenues. Excluding the impact of the energy sector, the S&P 500 index would witness a marginal rise of 0.4% in earnings.

Also, growth for the benchmark S&P 500 index remains elusive, with the quarter likely to see an earnings decline for the fifth quarter in a row. In fact, 8 of the 16 Zacks sectors (as of Jul 29) are projected to underperform.

As of Aug 4, 2016, 97.3% of the oil and energy companies reported second-quarter earnings results. These stocks account for 96.6% of the total market capitalization. Total earnings for these index members plunged 76.9% from the year-ago period, while revenues declined 24.4%.

Let’s take a look at how some oil companies might fare when they post their second-quarter results on Aug 8.

Energen Corporation (NYSE:EGN) has an Earnings ESP of -2.70% as the Most Accurate estimate is pegged at a loss of 38 cents, while the Zacks Consensus Estimate stands at a loss of 37 cents. The company has a Zacks Rank #2 (Buy) but a negative ESP complicates surprise prediction.

Vermilion Energy Inc. (TO:VET) missed the Zacks Consensus Estimate in three of the last four quarters, with an average miss of 238.39%. Also, our proprietary model does not show a likely earnings beat this quarter. This is because the company carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%.

RSP Permian Inc. (NYSE:RSPP) has an Earnings ESP of +25.00% and a Zacks Rank #2. This is a meaningful indicator of a likely positive earnings surprise. Last quarter, the company delivered a negative surprise of 23.08%. However, the company beat the Zacks Consensus Estimate in three of the past four quarters and managed an average beat of 70.30%.

Kosmos Energy Ltd (NYSE:KOS) delivered an average negative surprise of 33.34% in the trailing four quarters. On top of that, our model does not indicate that the company is likely to beat on earnings this time around. This is because though the company carries a Zacks Rank #3, it has an Earnings ESP of -7.69%.

Callon Petroleum Company (NYSE:CPE) has an Earnings ESP of 0.00% and a Zacks Rank #2. Though a favorable Zacks Rank increases the predictive power of ESP, an Earnings ESP of 0.00% makes surprise prediction difficult. Last quarter, the company reported break-even numbers, beating the Zacks Consensus Estimate of a loss of three cents. This had resulted in a positive earnings surprise of 100.00%.

Don’t miss out on our full earnings release articles for these oil stocks, as the actual results might hold some surprises!

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