Leading contract driller Diamond Offshore Drilling Inc. DO is expected to report first-quarter 2016 earnings on May 2.In the last quarter, the company’s earnings of 89 cents per share surpassed the Zacks Consensus Estimate of 53 cents and grew 23.6% from the year-ago earnings of 72 cents. Let’s see how things are shaping up prior to the announcement.Earnings WhispersOur proven model shows that Diamond Offshore Drilling is likely to beat earnings because it has the right combination of two key ingredients. Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +11.11%. This is because the Most Accurate estimate stands at 30 cents, while the Zacks Consensus Estimate is pegged at 27 cents. This is very meaningful and a leading indicator of a likely positive earnings surprise.Zacks Rank: Diamond Offshore Drilling carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Ranks #1 (Strong Buy), 2 (Hold) or 3 have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement. The combination of Diamond Offshore Drilling’s favorable Zacks Rank and a positive ESP makes us confident about an earnings beat.Factors Likely to Influence This QuarterDiamond Offshore Drilling remains in good financial health and has a track record of disciplined capital outlays and financial conservatism. As of Dec 31, 2015, Diamond Offshore Drilling had approximately $119 million in cash and cash equivalents, while long-term debt totaled $1,994.7 million.Diamond Offshore Drilling stresses on operational performance to survive amid the prolonged downturn in the oil and gas industry. We expect the company’s operational efficiency to have a favorable impact on the upcoming earnings as well.Notably, the company cancelled its quarterly dividend of 12.5 cents per share, effective immediately. This is expected to lead to annual savings of $69 million, which in turn, could be used to repay debt.The company aims to increase its footprint in emerging markets (such as Brazil, Australia and West Africa) to benefit from the recent discoveries of deepwater fields. Also, gradual improvement in the Gulf of Mexico drilling market (especially after the deepwater drilling ban was lifted), along with better bidding activity, will prove beneficial for Diamond Offshore Drilling.However, as an offshore drilling company, Diamond Offshore Drilling relies heavily on the volume of capital expenditure by the exploration and production sector. The current volatility in the oil and gas prices has put pressure on the activity level of the companies from sector, thereby affecting the profit levels of Diamond Offshore Drilling.Stocks to ConsiderHere are some companies from the same space which, according to our model, have the right combination of elements to post an earnings beat this quarter:Chesapeake Energy CHK has an Earnings ESP of +9.09% and a Zacks Rank #3.Ensco plc ESV has an Earnings ESP of +6.25% and a Zacks Rank #3.ConocoPhillips COP has an Earnings ESP of +1.84% and a Zacks Rank #3.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 >>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 ENSCO PLC (ESV): Free Stock Analysis Report DIAMOND OFFSHOR (DO): Free Stock Analysis Report CHESAPEAKE ENGY (CHK): Free Stock Analysis Report CONOCOPHILLIPS (COP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research