We expect oil and gas drilling contractor
Helmerich & Payne Inc.
) to beat expectations when it reports first-quarter fiscal 2013
results before the opening bell tomorrow, Thursday, Jan 31.
Why a Likely Positive Surprise?
Our proven model shows that Helmerich & Payne is likely to
beat earnings because it has the right combination of two key
Positive Zacks ESP:
Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), the difference between the Most Accurate estimate of $1.32 and
the Zacks Consensus Estimate of $1.28, stands at 3.13%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #3 (Hold):
The stocks with Zacks Ranks of #1, #2 and #3 have a significantly
higher chance of beating earnings. The sell rated stocks (#4 and
#5) should never be considered while going into an earnings
The combination of Helmerich & Payne's Zacks Rank #3
(Hold) and 3.13% ESP make us very confident in looking for a
positive earnings beat on Jan 31, 2013.
What is Driving the Better Than Expected
Helmerich & Payne remains relatively unscathed from any
economic turmoil, as the company's major work contracts are with
well capitalized oil majors and the larger independent oil
companies. Additionally, term contracts and shale drilling demand
for its rigs have helped Helmerich & Payne maintain a
relatively high level of utilization.
The positive trend is seen in the trailing four quarter
average surprise of 8.35%. The company's fourth-quarter 2012
surprise was 9.68% owing to better drilling activities and
innovative technological applications.
Other Stocks to Consider
Other 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 are as
Atlas Energy L.P
), Earnings ESP of + 260.00% and Zacks Rank #1 (Strong Buy).
Northern Tier Energy LP
), Earnings ESP of +22.86% and Zacks Rank #1 (Strong Buy).
Hercules Offshore Inc.
), Earnings ESP of + 14.29% and Zacks Rank #2 (Buy).
ATLAS ENERGY LP (ATLS): Free Stock Analysis
HERCULES OFFSHR (HERO): Free Stock Analysis
HELMERICH&PAYNE (HP): Free Stock Analysis
NORTHERN TIER (NTI): Free Stock Analysis
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