4 Energy Stocks Poised To Trump Earnings Estimates In Q2
Zacks Investment Research | Jul 18, 2019 10:40PM ET
As the fate of the Energy sector is tied to crude and natural gas prices, the major macro-economic issues that will most likely influence results this earning season are United States’ trade tensions with China and sanctions on Tehran.
Q2 Snapshot of Oil & Gas Prices
The second-quarter pricing scenario of West Texas Intermediate (WTI) crude was weaker than the year-ago period. However, the commodity’s aggregate price in the June quarter showed some sequential improvement.
Although the tightening of global crude supplies owing to sanctions on Iranian oil export by the United States drove WTI crude, the slowdown of global economy, fueled by intensifying trade tensions between Washington and Beijing, hurt oil demand. In April 2019, the United States tightened the ban on oil from Tehran as it expressed its unwillingness to extend sanction waivers on several countries beyond May 2.
Natural gas prices were weaker as compared to the June quarter of 2018. It seems that the tariff war between the two big economies has hurt clean energy demand as well.
How Did the Energy Sector Fare?
The drop in oil and natural gas prices is expected to hurt earnings of energy stocks. In comparison with more than 115% improvement in year-over-year earnings for the June quarter of 2018 for the Energy sector, earnings are expected to fall 0.6% this time around.
With this, the Energy sector is poised to see two consecutive quarters of earnings deterioration after strong earnings growth seen in each of the four quarters of 2018.
Picking the Right Stocks
Although the business scenario has been mostly unfavorable, there are a few stocks that are likely to beat estimates. However, screening such stocks from too many participants is not easy. A simple way to streamline the list is by selecting stocks with a positive Earnings ESP Filter .
Using this proven model, we have highlighted four Energy stocks that are likely to beat on earnings in their upcoming releases.
Headquartered in Houston, TX, Helix Energy Solutions Group Inc (NYSE:HLX) is primarily a provider of specialty services to energy players with operations in offshore plays.
Helix Energy, scheduled to report Q2 results on Jul 24, has an Earnings ESP of +7.61% and a Zacks Rank #1. The company also delivered a positive earnings surprise of 150% in the last reported quarter.
Helix Energy Solutions Group, Inc. Price and EPS Surprise
.
Get The News You Want
Enterprise Products Partners L.P. Price and EPS Surprise
Enterprise Products Partners L.P. Quote
Headquartered in Houston, TX, W&T Offshore Inc. (NYSE:WTI) is primarily engaged in exploration and production of oil and natural gas. The company has an Earnings ESP of +22.45% and a Zacks Rank #3. The company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average positive surprise being 21.9%.
Headquartered in Houston, TX, Dril-Quip Inc (NYSE:DRQ) is a leading designer and manufacturer of drilling equipment for operations in the onshore and offshore plays. The stock, carrying a Zacks Rank #3, has an Earnings ESP of +285.70%.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.