What's in Store for Noble Energy (NBL) in Q3 Earnings?
Noble Energy Inc. NBL will release third-quarter 2015 results before the market opens on Nov 2, 2015. In the prior quarter, this independent oil and gas companyposted a positive earnings surprise of 333.33%. Let’s see how things are turning out for the upcoming quarter.
Factors at Play
Noble Energy’s business is directly dependent on crude prices, like any other energy player primarily involved in exploration, development and production of crude oil. The crude pricing environment during the third quarter was not very promising.
Oil price during the Jul–Sep 2015 period hovered mostly between $45 and $55 per barrel. This was considerably below the prior-year quarter level, when crude was trading around the $100 per barrel mark. We believe that the dismal crude pricing scenario will weigh on the company’s bottom line.
Since Noble Energy relies on third parties for transportation of oil and natural gas production, delays, disruptions and unprofitable prices could have an adverse impact on third-quarter results.
However, cost curtailment, reduction in drilling times and a well-balanced diversified portfolio of high-quality domestic and international assets seem to favor the company.
Earnings Whispers
Our proven model does not conclusively show that Noble 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. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for the stock is currently -26.67%. This is because the Most Accurate Estimate is pegged at a loss of 19 cents and the Zacks Consensus Estimate stands at a loss of 15 cents.
Zacks Rank: Though Noble Energy’s Zacks Rank #3 (Hold) increases the predictive power of the ESP, we nevertheless need a positive ESP to be confident about a surprise call. Unfortunately, a -26.67% ESP for the company tips the scale against its favor.
We note that Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:
WPX Energy, Inc. WPX has an Earnings ESP of +9.09% and a Zacks Rank #3.
Warren Resources Inc. WRES has an Earnings ESP of +9.09% and a Zacks Rank #3.
PDC Energy, Inc. PDCE has an Earnings ESP of +2.13% and a Zacks Rank #3.
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NOBLE ENERGY (NBL): Free Stock Analysis Report
WPX ENERGY INC (WPX): Free Stock Analysis Report
PDC ENERGY INC (PDCE): Free Stock Analysis Report
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