Whiting Petroleum (WLL): What's Expected In Q2 Earnings?

Domestic oil and gas explorer Whiting Petroleum Corp. (NYSE:WLL) is set to release second-quarter 2016 results after the closing bell on Wednesday, Jul 27.

In the preceding three-month period, this Denver, CO-based firm delivered a negative earnings surprise of 19.72%. However, the trailing four-quarter average beat for the company is 117.24%. Let's see what is in store for this quarter.

Factors to Consider This Quarter

As a leading upstream energy firm, Whiting Petroleum’s business is dependent on commodity prices.

Throughout the quarter under review, 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, last month, oil prices settled above the psychologically important $50 per barrel level for the first time in more than 10 months. Despite these improvements, the pricing scenario of the commodity was weaker than the year-ago-comparable quarter.

On the production front, Whiting Petroleum projects second-quarter volumes of 12.2–12.7 million barrels of oil equivalent (MMBOE), lower than 15.49 MMBOE output in second-quarter 2015.

Overall, both the output figure and crude prices, if compared with the Apr–Jun period of 2015 are not in favor of the company.

Earnings Whispers

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

Zacks ESP: Whiting Petroleum has an earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 51 cents.

Zacks Rank: Whiting Petroleum’s Zacks Rank #2 increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.

The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

WHITING PETROLM Price and EPS Surprise

Stocks to Consider

Though an earnings beat looks uncertain for Whiting Petroleum, here are some companies that you may want to consider on the basis of our model, as they have the right combination of elements to post an earnings beat this quarter:

Anadarko Petroleum Corporation (NYSE:APC) has an Earnings ESP of +1.33% and a Zacks Rank #2. The company is likely to release earnings results on Jul 26.
Legacy Reserves LP (NASDAQ:LGCY) has an Earnings ESP of +31.58% and a Zacks Rank #1. The partnership is expected to release earnings results on Aug 3.

Ring Energy Inc. (NYSE:REI) has an Earnings ESP of +33.33% and a Zacks Rank #2. The company is anticipated to release earnings results on Aug 8.