What's In The Cards For Loews (L) This Earnings Season?

Loews Corporation (NYSE:L) will release first-quarter 2017 results before the opening bell on Mar 1. Last quarter, this company delivered a 25.40% positive earnings surprise. Let’s see how things are shaping up for this announcement.

Factors Influencing this Past Quarter

CNA Financial’s (NYSE:CNA) operational strength and prudent underwriting approach is expected to help it deliver improved results this quarter. The insurer has been investing in information technology to boost its underwriting capabilities. However, this is likely to put pressure on margins.

Loews Hotels is expected to continue posting impressive results.

Investment income is expected to have benefited from alternative investments. Also, a slight improvement in interest rate environment with two rate hikes (Dec 2015 and Mar 2016) is likely to have added to the upside.

Share buybacks should also have boosted the bottom line.

However, lesser contract drilling revenues, lower dayrates, reduced exploration and production budgets and an influx of new rig deliveries are likely to have weighed on Diamond Offshore’s (NYSE:DO) performance.

With respect to the surprise trend, Loews surpassed expectations in three of the last four quarters with an average negative surprise of 7.23%.

The company’s share price has been fluctuating over the last few days. We wait to see how the stock performs after the quarterly result announcement.

Loews Corporation Price and EPS Surprise

Loews Corporation Price and EPS Surprise | Loews Corporation Quote

Earnings Whispers

Our proven model does not conclusively show that Loews will beat the Zacks Consensus Estimate in the first quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. However, this is not the case here as elaborated below.

Zacks ESP: Loews has an Earnings ESP of -3.03%. This is because the Most Accurate estimate stands at 64 cents and the Zacks Consensus Estimate is pegged higher at 66 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Loews has a Zacks Rank #3, which increases the predictive power of ESP. However, a negative Earnings ESP makes surprise prediction difficult.

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

Stock to Consider

Here is an insurer that you may want to consider as it has the right combination of elements to post an earnings beat this quarter:

Prudential Financial Inc. (NYSE:PRU) has an Earnings ESP of +0.38% and a Zacks Rank #2. The company is set to report first-quarter earnings on May 3. You can see the complete list of today’s Zacks #1 Rank stocks here.