Oil Stocks To Watch For Earnings On Aug 10: WPT, BXE, AXAS

We are now at the tail end of the second-quarter earnings season, with 86.6% of the S&P 500 members having reported already (as of Aug 5).

Q2 Earnings as of Now

So far, we have second-quarter results from 433 S&P 500 members that combined account for 87.7% of the index’s total market capitalization. Total earnings for these companies are down 4.1% from the same period last year and revenues have also declined 0.9%. Coming to the beat ratio, 70.7% came up with positive earnings surprises and 52.7% surpassed revenue estimates as per the Earnings Preview dated Aug 5.

Energy Sector Through Q2

Expectedly, the ‘Energy’ sector has been a big drag on the aggregate growth picture. Of the sector components on the S&P 500 index that have reported results, total earnings are down 78.9% on 24.4% lower revenues.

But the sector’s results are so far better than expected, with 70.3% of companies beating on earnings.

How Has Q2 Treated Oil Stocks?

The second quarter saw crude advancing more than 26% sequentially − the best quarterly percentage gain in seven years. During the quarter, oil price improved significantly from mid-February, when West Texas Intermediate (WTI) crude fell to a 12-year low mark of $26.05 per barrel. Moreover, in June, oil prices settled above the psychologically important $50 per barrel level for the first time in more than 10 months.

Definitely, it was favorable for companies involved in oil exploration and production activities as upstream players were able to sell the commodity at much higher prices.

The quarter also favored midstream energy firms involved in the storage of crude since the commodity has been oversupplied for a length of time.

Let’s take a look at how three oil stocks, that are expected to post their quarterly results on Aug 10, are placed.

World Point Terminals LP (NYSE:WPT) failed to beat the Zacks Consensus Estimate in two of the trailing four quarters, with an average negative surprise of 0.42%.

Earnings beat is uncertain for the second quarter. This is because, as per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

World Point Terminals has an Earnings ESP of 0.00% which makes surprise prediction difficult in spite of a Zacks Rank #3.

WORLD POINT TER Price and EPS Surprise

WORLD POINT TER Price and EPS Surprise | WORLD POINT TER Quote

Bellatrix Exploration Ltd. (TO:BXE) has an average positive surprise of 33.81% for the trailing four quarters, in each of which it surpassed the Zacks Consensus Estimate.

However, our model does not indicate that the company is likely to beat on earnings this time around. This is because despite Bellatrix Exploration’s a Zacks Rank #3, it has an Earnings ESP of 0.00%.

BELLATRIX EXPLR Price and EPS Surprise

BELLATRIX EXPLR Price and EPS Surprise | BELLATRIX EXPLR Quote

Abraxas Petroleum Corp. (NASDAQ:AXAS) has an average positive surprise of 25.00% over the last four quarters.

However, our model does not indicate that the company will beat on earnings this time around. Abraxas Petroleum carries a Zacks Rank #2. However, its Earnings ESP of 0.00% makes surprise prediction difficult.

ABRAXAS PETE/NV Price and EPS Surprise

ABRAXAS PETE/NV Price and EPS Surprise | ABRAXAS PETE/NV Quote

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