The world's largest oilfield services provider
) is scheduled to report its fourth quarter and full year 2011
results on January 25, 2012, before the opening bell.
The Zacks Consensus Estimate for the to-be-reported quarter is a
profit of $1.34 per share on revenues of $9.2 billion. For the full
year, our earnings per share projection is $6.06 on revenues of
Third Quarter 2011 Recap
Hess' third-quarter 2011 results were lower than expected with
earnings per share of $1.11 per share considerably lagging the
Zacks Consensus Estimate of $1.40. The quarterly result was also
below the adjusted year-earlier earnings of $1.31. The
underperformance was mainly due to lower production realized in the
Total revenue slid 2.5% year over year to $8,726 million in the
quarter, and failed to meet the Zacks Consensus Estimate of $10,596
(Read our full coverage on this earnings report:
Hess Fails to Meet Consensus
Agreement of Analysts
Analysts exhibit a cautious sentiment for Hess in the upcoming
quarter based on its gas/oil price volatility, high drilling costs,
project delays and weak macro backdrop.
For the fourth quarter, out of the 12 analysts covering the
stock, 8 analysts have lowered their estimates, while only 1 has
raised the same in the last 30 days. In the last 7 days, only 3
analysts have revised the estimate downward while none of the
analysts moved in the opposite direction.
For fiscal 2011, 7 analysts (out of 12 analysts) decreased their
estimates and one analyst has increased the projection over the
past one month. In the last seven days, 3 analysts have lowered the
estimate and none raised the same.
Magnitude of Estimate Revisions
Taking into effect the analysts' earnings revision, the Zacks
Consensus Estimate for the fourth quarter dropped to $1.34 from
$1.51 recorded 30 days back. For the full year, estimate went down
to $6.06 from $6.22, over the last one month.
About a week ago, the estimates were $1.38 and $6.10 for the
quarter and year, respectively.
The company has a history of negative earnings surprises,
lagging the Zacks Consensus Estimate in each of the last 4
quarters. The company recorded a minimum surprise of negative 1.62%
in first quarter 2011 to a maximum of negative 20.7% in third
quarter 2011. On an average, the earnings surprise stood at
Hess shares currently retain a Zacks #3 Rank, which translates
into a short-term Hold rating. We are also maintaining our
long-term Neutral recommendation on the stock.
We believe that Hess has a competitive advantage over its peers
based on improving fundamentals, commodity price leverage and
exposure to areas with high resource potential (such as Brazil,
Ghana, Libya and offshore Australia). We continue to see an
upstream momentum on the back of the company's large inventory of
exploration and development projects.
However, despite having a downstream business, the company's
earnings are heavily exposed to the exploration and production
segment, which is inherently risky, often with an equal share of
success and failure.
Another prominent energy firm,
) will also report its fourth quarter earnings tomorrow.
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HESS CORP (
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