What's In The Cards For Newfield (NFX) This Earnings Season?

Newfield Exploration Company (NYSE:NFX) is expected to report first-quarter 2018 earnings on May 1, after the closing bell.

The upstream energy player surpassed the Zacks Consensus Estimate in the last reported quarter, the positive earnings surprise being 18.3%. Moreover, for the trailing four quarters, the company has an average positive earnings surprise of 15.9%.

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

Which Way Are Estimates Treading?

Let’s look at the estimate revision trend to get a clear picture of what analysts expect from the company’s upcoming quarterly release.

The Zacks Consensus Estimate of 72 cents for first-quarter 2018 earnings has been revised upward over the last 30 days, with four firms being bullish and four firms taking a bearish stance. It reflects an improvement of about 26.3% from the year-ago quarter’s figure.

Further, analysts polled by Zacks expect revenues of $557.2 million for the quarter, up 33.6% from a year ago.

Earnings Whisper

Our proven model does not show that Newfield is likely to beat estimates this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -0.62%. This is because the Most Accurate estimate is 71 cents, while the Zacks Consensus Estimate is pegged at 72 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Newfield carries a Zacks Rank #3.

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

Factors to Consider

The Zacks Consensus Estimate for average sale price of natural gas is $2.70 per thousand cubic feet (Mcf), implying a rise from $2.58 per Mcf in the last reported quarter and a decline from $2.93 per Mcf in the year-ago quarter. The Zacks Consensus Estimate for natural gas production for the first quarter is 35.7 billion cubic feet (Bcf), indicating a fall from 36.6 Bcf in fourth-quarter 2017 and an improvement from 29.4 Bcf in the year-ago quarter.

The average sales price of natural gas liquids for the first quarter is estimated at $31 per barrel, reflecting a rise from $30.15 per barrel and $27.03 per barrel in the last reported quarter and year-ago quarter, respectively. Production is expected to rise to 3.14 million barrels (MMBbls), implying a rise from the year-ago quarter’s 2.45 MMBbls and a decline from the preceding quarter’s 3.34 MMBbls and.

Average crude oil and condensate sales price is expected at $55 a barrel, showing a rise from $49.6 per barrel in the fourth quarter and $46.79 per barrel in the prior-year quarter. Production of crude oil per day for the first quarter is expected at 6.61 MMBbls, showing a rise from the previous quarter’s 6.18 MMBbls and the year-ago quarter’s 5.63 MMBbls.

We expect the company to deliver higher production figures in the upcoming quarterly results, which will also reflect the impact of price hike.

Q1 Price Performance

During the first quarter, Newfield’s shares underperformed the industry. The company’s shares lost 22.5% compared with the industry’s 4.4% decline.

Stocks to Consider

Here are a few companies, which per our model, have the right combination of elements to post an earnings beat in the quarter to be reported.

Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) manufactures and provides patented mobile proppant management systems which unload, store and deliver proppant at oil and natural gas well sites. The company has an Earnings ESP of +6.28% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources, Inc (NYSE:EOG) is a major independent oil and gas exploration and production company. The company has an Earnings ESP of +4.07% and a Zacks Rank #1.

Continental Resources, Inc (NYSE:CLR) is an independent oil and natural gas exploration and production company. The company has an Earnings ESP of +1.35% and carries a Zacks Rank #2.

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