We expect natural gas producer,
Ultra Petroleum Corporation
), to beat expectations when the company reports its
first-quarter 2013 results tomorrow on May 3, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Ultra Petroleum 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
), which represents the difference between the Most Accurate
estimate of 29 cents and the Zacks Consensus Estimate of 28
cents, stands at +3.57%. This is a meaningful and leading
indicator of a likely positive earnings surprise for shares.
Zacks Rank #2 (Buy):
The stocks with a Zacks Rank #1 (Strong buy), #2 (Buy) and #3
(Hold) have a significantly higher chance of beating earnings.
The Sell-rated stocks (#4 and #5) should never be considered
while going into an earnings announcement.
The combination of Ultra Petroleum's Zacks Rank #2 (Buy) and
+3.57% ESP makes us very confident of a positive earnings beat on
May 3, 2013.
What is Driving the Better-Than-Expected
Ultra Petroleum controls substantial acreage in and around the
prolific Jonah natural gas field and the Pinedale Anticline area
in the Green River Basin. Both of these areas are endowed with
rich natural gas reserves, which have remained largely
Moreover, Ultra Petroleum has amassed a large acreage position
in the prolific Marcellus Shale play, a key natural gas drilling
area located throughout Western Pennsylvania and much of the
Appalachian Basin. This provides the company with a multi-year
inventory of low-risk development drilling opportunities.
Besides that, Ultra Petroleum maintains a very competitive
cost structure, which contributes to the consistency of its
growth and returns throughout the business cycle.
Finally, for the last few months the price of natural gas has
been on the rise mainly because of a bitter winter. As Ultra
Petroleum focuses mainly on natural gas, we believe that Ultra
Petroleum will beat earnings this quarter.
Other Stocks to Consider
Here are some other energy firms that are worth considering as
these have the right combination to post an earnings beat this
) has an earnings ESP of +28.95% and a Zacks Rank #1 (Strong
Atlas Resource Partners LP
) has an earnings ESP of +8.70% and a Zacks Rank #2 (Buy).
EV Energy Partners LP
) has an earnings ESP of +10.00% and a Zacks Rank #2 (Buy).
ATLAS RES PTNRS (ARP): Free Stock Analysis
EV ENERGY PTNR (EVEP): Free Stock Analysis
SEMGROUP CORP-A (SEMG): Free Stock Analysis
ULTRA PETRO CP (UPL): Free Stock Analysis
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