Send me real-time posts from this site at my email

Energy Stock Q2 Earnings to Watch on Jul 20: SLB, BHGE, ECA

The Q2 earnings season has just started off, with releases from only 48 S&P 500 members. The companies recorded year-over-year earnings growth of 23% on 10% higher revenues.

Around 89.6% of the S&P 500 companies surpassed the Zacks Consensus Estimate for earnings, while 83.3% beat the revenue mark. Notably, 75% surpassed the Zacks Consensus Estimate for both earnings and revenues.

Energy to See Strongest Earnings Growth

Among all the Zacks sectors defining the elite S&P 500 index, Energy is poised to witness the highest earnings growth. This time, we expect Energy to be the only sector posting triple-digit earnings growth of 136.9%.

Excluding Energy, the S&P 500’s earnings growth will likely slip to 17% from 20.4%. In the last few quarters, Energy continued to be the key sector backing the index’s earnings growth, per the latest Earnings Trends.

Heathy Oil Price to Back Energy

For the month of April, May and June of 2018, average West Texas Intermediate (WTI) crude prices were recorded at a respective $66.25 per barrel, $69.98 and $67.87 — per data from the U.S. Energy Information Administration (EIA). These average prices were considerably higher than the year-ago respective prices of $51.06, $48.48 and $45.18.

It is to be noted that since 2015, the average monthly crude pricing scenario through second-quarter 2018 has been the healthiest.

The fate of most energy players is linked to the price of oil. Upstream energy players like explorers and producers as well as oilfield services players generally gain from a rally in crude price.

Stocks to Watch

We have highlighted three energy players gearing up to report second-quarter 2018 results on Jul 20.

Headquartered in Houston, TX, Schlumberger Limited SLB managed to surpass the Zacks Consensus Estimate for earnings in two of the last four quarters, the average positive surprise being 6.4%. 

Our proven model does not show a beat for Schlumberger this earnings season. That is because a stock needs to have 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 the oilfield services player carries an Earnings ESP of -0.08% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Based in Houston, TX, Baker Hughes, a GE company BHGE posted an average negative earnings surprise of 42.49% for the last four quarters.

Our proven model shows that Baker Hughes is unlikely to beat estimates this earnings season as the oilfield services firm carries a Zacks Rank #4 (Sell) and an Earnings ESP of -9.42%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Encana Corporation ECA, based in Calgary, Alberta, has an average positive earnings surprise of 83.3% for the last four quarters.

Our proven model does not show a beat for Encana this earnings season. This is because it has an Earnings ESP of -23.91% and a Zacks Rank #2. (Read more: Encana to Report Q2 Earnings: What Should You Expect?)

Encana Corporation Price and EPS Surprise

Encana Corporation Price and EPS Surprise | Encana Corporation Quote

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Encana Corporation (ECA): Free Stock Analysis Report
Schlumberger Limited (SLB): Free Stock Analysis Report
Baker Hughes, a GE company (BHGE): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

Welcome!!! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue