Hamilton, Bermuda-based drilling firm
is scheduled to report its fourth-quarter and full-year 2012
results on Thursday, Feb 28, 2013.
In the third quarter, the company delivered a negative 40.30%
earnings surprise due to foreign exchange losses and higher
operating expenses. In fact, SeaDrill has delivered negative
earnings surprises in 2 of the last 4 quarters, with an average
miss of 6.14%. Let's see how things are shaping up prior to
Factors to Consider This Quarter
We believe that Seadrill intends to benefit from the current
strength in demand scenario and utilize the units in various
offshore locations across the globe.
However, SeaDrill's financial and operational performances
face a number of headwinds, including changes in exploration and
production spending pattern, commodity price fluctuation,
geopolitical risks, regional spending trends, competition,
technological innovation and changes in economic conditions.
Moreover, the Zacks Consensus Estimate for the fourth quarter
of 2012 moved down 8.57% over the last 90 days to 64 cents per
share. For fiscal 2012, the Zacks Consensus Estimate fell 2.06%
over the same timeframe to $2.85 per share.
Our proven model does not conclusively show that SeaDrill
Limited is likely to beat the Zacks Consensus Estimate in the
fourth quarter. That is because a stock needs to have both a
positive earnings Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3
(Hold) for this to happen. But this is not the case here as
Negative Zacks ESP:
This is because the Most Accurate estimate stands at 53 cents
while the Zacks Consensus Estimate is higher at 64 cents. This
results in a difference of -17.19%.
Zacks Rank #3 (Hold):
SeaDrill's Zacks Rank #3, however, increases the forecasting
power of ESP. That said, we also need to have a positive ESP to
be confident of an earnings surprise call.
Other Stocks to Consider
Here are some other companies that warrant a look as these
have the right ingredients to report an earnings beat this
Northern Tier Energy LP
), earnings ESP of +3.65% and Zacks Rank #1 (Strong Buy).
), earnings ESP of +1.35% and a Zacks Rank #1 (Strong Buy).
New York & Company Inc.
), earnings ESP of +12.50% and Zacks Rank #2 (Buy).
EXPRESS INC (EXPR): Free Stock Analysis
NORTHERN TIER (NTI): Free Stock Analysis
NEW YORK & CO (NWY): Free Stock Analysis
SEADRILL LTD (SDRL): Free Stock Analysis
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