U.S. energy behemoth
) is set to report first-quarter 2014 results before the opening
bell on May 2. Chevron has failed to beat estimates in the past
three quarters with an average negative earnings surprise of
3.87%. Let's see how things are shaping up prior to this
Factors to Consider This Quarter
Earlier in the month, the San Ramon, CA-based company issued an
interim update for first quarter 2014 whereby it anticipated
earnings to be sequentially lower. Chevron stated that it expects
huge currency conversion expenses and asset impairment charges to
hamper the results.
The company stated that first quarter production have been
hampered by increased downtime in several regions, as a result of
unfavorable weather. Consequently, total production is expected
to fall below the year-ago quarter level. However, the decline
should be partially offset by higher output from the LNG facility
Chevron also mentioned that for the first two months in 2014,
liquid realization was lower than the first quarter of 2013.
International natural gas realizations was weak as well, though,
U.S. natural gas realizations improved year over year.
Chevron's downstream operations are also expected to post weak
results, hampered by maintenance activities at multiple
refineries. Following these negative announcements, the majority
of brokerage firms have lowered their estimates.
Our proven model does not conclusively show that Chevron is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. This is not the
Negative Zacks ESP:
This is because the Most Accurate estimate stands at $2.47 per
share while the Zacks Consensus Estimate is $2.53, resulting in a
Zacks Rank #3 (Hold):
Chevron's Zacks Rank #3 when combined with a negative ESP lowers
the predictive power and makes surprise prediction difficult.
We caution against stocks with Zacks #4 and 5 Ranks (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions.
Other Stocks to
Here are some other companies you may want to consider as our
model shows these have the right combination of elements to post
an earnings beat this quarter:
Callon Petroleum Co.
), earnings ESP of +25.00% and Zacks Rank #2 (Buy). The company
is slated to release first quarter earnings on May 8.
Canadian Natural Resources Ltd
), earnings ESP of +8.22% and Zacks Rank #2. The company is
expected to release earnings after the closing bell on May 8.
Abraxas Petroleum Corp.
), earnings ESP of +20.00% and Zacks Rank #2. The company is
scheduled to release earnings on May 8.
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
CDN NTRL RSRCS (CNQ): Free Stock Analysis
CALLON PETE-DEL (CPE): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis
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