Canada's biggest energy firm and the largest oil sands outfit,
Suncor Energy Inc.
(
SU
) is scheduled to report its fourth-quarter and full-year 2012
results after the market closes on Tuesday, Feb 5, 2013.
In the third quarter, the company delivered a positive 13.33%
earnings surprise, aided by volume growth at Oil Sands along with
better refinery margins and start-up of operations in Libya. This
represented the fourth straight quarter of positive earnings
surprise. Let's see how things are shaping up prior to this
announcement.
Factors to Consider This Quarter
The operating scenario for oil sands developers will remain
critical in the near to medium term. Suncor is also susceptible
to oil and gas prices, which are inherently volatile and subject
to complex market forces.
Suncor's deep oil sands technology, though proven, is still
vulnerable to potential implementation delays. In particular,
there are risks related to growth and other capital projects that
depend wholly or partly on new technologies. A high debt level
and significant capital expenditure may also have adverse affects
on the company's earnings and cash flows.
In fact, the Zacks Consensus Estimate for the fourth quarter
has moved down by 2 cents to 80 cents per unit over the last 30
days as the tendency for a downward revision was more
obvious.
Earnings Whispers
Our proven model does not conclusively show that Suncor Energy
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 Zacks Rank #2
(Buy) or 3 (Hold) for this to happen. But this is not the case
here as elaborated below.
Negative Zacks ESP:
The Most Accurate estimate stands at 78 cents while the Zacks
Consensus Estimate is higher at 80 cents. This results in a
difference of -2.50%.
Zacks Rank #3 (Hold):
Suncor's Zacks Rank #3, however, increases the predictive 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 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:
Atlas Energy L.P
(
ATLS
), earnings ESP of +260.00% and Zacks Rank #1 (Strong Buy).
Northern Tier Energy LP
(
NTI
), earnings ESP of +7.97% and Zacks Rank #1 (Strong Buy).
Hercules Offshore Inc.
(
HERO
), earnings ESP of +14.29% and Zacks Rank #2 (Buy).
ATLAS ENERGY LP (ATLS): Free Stock Analysis
Report
HERCULES OFFSHR (HERO): Free Stock Analysis
Report
NORTHERN TIER (NTI): Free Stock Analysis
Report
SUNCOR ENERGY (SU): Free Stock Analysis
Report
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