Upstream energy partnership Vanguard Natural Resources LLC VNR is set to release its first-quarter 2016 results after the closing bell on Monday, May 2. In the preceding three-month period, the Houston, TX-based oil and gas finder reported a massive positive earnings surprise of 226.67%. Coming to earnings surprise history, Vanguard Natural Resources has a mixed track record. The company beat estimates in two of the last four quarters. Let’s see how things are shaping up for this announcement. Factors to Consider This Quarter Vanguard Natural Resources is a firm in the oil and gas exploration and production industry, which makes its earnings vulnerable to the weak commodity price fluctuations. Oil price during the Jan–Mar 2016 period hovered mostly around $33 per barrel. This was considerably below the prior-year quarter level of around $41 per barrel. Therefore, quite predictably, Vanguard Natural Resources has been able to extract less value for its products. Hence, we expect the group’s first-quarter profit margins to remain under pressure. However, the company has hedged the majority of its production for 2016 at promising prices. The company has hedged 67% of oil at $67.5 per barrel and 78% of gas at $4.15 per million cubic feet equivalent. This should cushion the company from the current volatile pricing environment. Also, Vanguard Natural Resources has worked hard to improve the well economics through meaningful reductions in well cost and better rate of return. This might also boost the upcoming results. Earnings Whispers Our proven model does not conclusively show that Vanguard Natural Resources will 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) to be able to beat estimates. That is not the case here as you will see below. Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -100%. This is because the Most Accurate estimate stands at breakeven, while the Zacks Consensus Estimate is pegged higher, at 3 cents. Zacks Rank: Vanguard Natural Resources has a Zacks Rank #1 (Strong Buy). Though a Zacks Rank #1 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult. Note that stocks with a Zacks Ranks #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings. We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions. Stocks to Consider While earnings beat looks uncertain for Vanguard Natural Resources, here are some companies you may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter: Enable Midstream Partners, LP ENBL has Earnings ESP of +21.05% and a Zacks Rank #1. The company is expected to release earnings on May 4. AmeriGas Partners LP APU has Earnings ESP of +4.74% and a Zacks Rank #2. The partnership is anticipated to release earnings on May 2. Bill Barrett Corp. BBG has Earnings ESP of +9.09% and a Zacks Rank #2. The company is likely to release earnings on May 5. 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 AMERIGAS PARTNR (APU): Free Stock Analysis Report ENABLE MIDSTRM (ENBL): Free Stock Analysis Report VANGUARD NATURL (VNR): Free Stock Analysis Report BILL BARRETT CP (BBG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research