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Will WPX Energy (WPX) Deliver a Beat This Earnings Season?

Zacks Equity Research
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Callon Petroleum (CPE) Beats on Q3 Earnings and Revenues

Callon Petroleum's (CPE) third quarter 2018 results benefit from higher oil-equivalent production and increased realized oil price.

WPX Energy, Inc. WPX is scheduled to release second-quarter 2018 results on Aug 1, after the closing bell. The company delivered a negative surprise of 200% in the previous quarter.

Why a Likely Positive Surprise?

Our proven model does show that WPX Energy is going to beat estimates this quarter to be reported. This is because the stock has the required impressive attributes of both a positive Earnings ESP  and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Earnings ESP: WPX Energy has an Earnings ESP of +13.45%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: WPX Energy’s Zacks Rank #3 increases the predictive power of ESP. Thus, the combination of a solid Zacks Rank with a positive ESP makes us reasonably confident about a likely earnings surprise this reporting cycle.

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

WPX Energy, Inc. Price and EPS Surprise

WPX Energy, Inc. Price and EPS Surprise | WPX Energy, Inc. Quote

Factors to Consider

The company is expecting an increase of nearly 10,000 barrels of production per day, a rise of nearly 16% compared with first-quarter 2018, which is primarily driven by a strong performance at both the WPX’s basins, namely Delaware and Williston Basin.

At present, nearly 80% production of the company constitutes liquids (Oil and Natural Gas liquids) and the rest is natural gas. It was simply the opposite only five years ago. This transformation is a result of execution of the company’s plan to produce more liquids. The Zacks Consensus Estimate for oil production in the second quarter is pegged at 77,000 barrels per day, reflecting year-over-year growth of nearly 53.1%.

Per the Zacks Consensus Estimate, nearly 65.3% of its total production in the to-be-reported-quarter will be oil. WPX Energy is likely to benefit from its focus on oil and improving commodity prices. In addition, the company has hedged a substantial volume of its oil and natural gas production to protect it from fluctuating prices.

The Zacks Consensus Estimate for total revenues of the company stands at $446 million, representing 8% increase from the year-ago quarter. The consensus mark for second-quarter earnings is pegged at 2 cents per share compared with a loss of 14 cents in the prior-year period.

Other Stocks to Consider

Here are a few other companies worth considering from the same industry with the right combination of elements to beat on earnings this season.

Northern Oil and Gas, Inc. NOG is expected to report second-quarter 2018 earnings on Aug 14. It has an Earnings ESP of +2.44% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Penn Virginia Corporation PVAC has an Earnings ESP of +6.72% and is a Zacks #1 Ranked player. It is slated to report second-quarter 2018 earnings on Aug 7.

Denbury Resources Inc. DNR has an Earnings ESP of +27.78% and a Zacks Rank #2. It is scheduled to report second-quarter 2018 earnings on Aug 7.

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Denbury Resources Inc. (DNR) : Free Stock Analysis Report
 
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Penn Virginia Corporation (PVAC) : Free Stock Analysis Report
 
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