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Will Noble Energy (NBL) Beat Expectations in Q2 Earnings? - Analyst Blog

Zacks Equity Research
Updated

Noble Energy Inc. NBL will release second-quarter 2015 earnings results before the market opens on Aug 3, 2015. In the prior quarter, this independent oil and gas company’s earnings were in line with estimates. We expect the company to come up with an earnings beat in the second quarter.

Why a Likely Positive Surprise?

Our proven model shows that Noble Energy is likely to beat earnings because it has the right combination of two key ingredients. 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) for this to happen. This is the case here.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate of 7 cents and the Zacks Consensus Estimate of 6 cents, is at +16.67%. This is a meaningful indicator of a likely positive earnings surprise for the shares.

Zacks Rank: The combination of Noble Energy’s Zacks Rank #3 and +16.67% ESP makes us confident of a likely earnings beat.

The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.  

What is Driving the Better-Than-Expected Earnings?

Noble Energy will benefit from its ongoing emphasis to lower capital and operating costs. The company aims to achieve 20% savings, with its lease operating expenses already down substantially.

Second-quarter sales volume is expected to range between 290,000 and 300,000 barrels of oil equivalent per day, impacted by planned facility maintenance and turnarounds in West Africa and the Gulf of Mexico.

Noble Energy is expected to benefit from its strong operating performance in the DJ Basin and Marcellus Shale. Other non-U.S. assets are also expected to boost performance in the second quarter.

Other Stocks to Consider

Here are some other companies in the same space worth considering on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter.

Cobalt International Energy, Inc. CIE has an earnings ESP of +13.64% and carries a Zacks Rank #2.

Warren Resources Inc. WRES has an earnings ESP of +9.09% and carries a Zacks Rank #2.

Apache Corp. APA has an earnings ESP of +15.63% and carries 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
 
APACHE CORP (APA): Free Stock Analysis Report
 
NOBLE ENERGY (NBL): Free Stock Analysis Report
 
COBALT INTL EGY (CIE): Free Stock Analysis Report
 
WARREN RSRCS (WRES): Free Stock Analysis Report
 
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Zacks Investment Research