WPX Energy (WPX): What's In Store This Earnings Season?

WPX Energy, Inc. (NYSE:WPX) is slated to release its third-quarter earnings after the market closes on Nov 2. In the last reported quarter, the company recorded a negative earnings surprise of 27.27%. Let’s see how things are shaping up prior to this announcement.

Factors to Consider

During the second quarter, WPX Energy raised its oil production guidance for 2016 by 5% to 39–41 thousand barrels of oil per day (Mboe/d) from the earlier expectation of 37–39 M boe/d. We believe that its exposure in the Delaware, Williston and San Juan basins will help the company achieve its production goal for 2016.

Meanwhile, even though oil prices have recovered from the historical lows it had touched this February, the prices are still lower than the prior-year level. As a result, the company will not be able to fully realize the benefits of higher oil production volumes due to ongoing low oil prices.

Earnings Whispers

Our proven model does not conclusively show that WPX Energy is likely to 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) for this to happen. But that is not the case here, as you will see below.

Zacks ESP: The Most Accurate estimate stands at a loss of 19 cents, wider than the Zacks Consensus Estimate of a loss of 18 cents, resulting in an Earnings ESP of -5.56%.

Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank: Although WPX Energy’s Zacks Rank #3 increases the predictive power of ESP, we need a positive Earnings ESP to be confident of an earnings beat.

Note that we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

WPX Energy currently does not have the required combination for an earnings surprise this season. Nevertheless, we have quite a few companies in the energy sector that possess the right combination to come out with positive surprise this season.

Tesco (LON:TSCO) Corporation (NASDAQ:TESO) currently has a Zacks Rank #2 and a positive earnings ESP of 7.89%. The company will release third-quarter earnings before the market opens on Nov 4.

Enbridge Inc. (NYSE:ENB) will release third-quarter earnings before the market opens on Nov 3. The company currently has an Earnings ESP of 27.59% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CONE Midstream Partners LP (NYSE:CNNX) currently has a Zacks Rank #2 and a positive earnings ESP of 2.70%. The company will release third-quarter earnings before the market opens on Nov 4.

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