Oil and natural gas driller,
) is expected to report third quarter 2013 earnings on Thursday,
Oct 24, before the opening bell. Let's see how things are shaping
up prior to the announcement.
ENSCO PLC (ESV): Free Stock Analysis Report
LEGACY RESERVES (LGCY): Free Stock Analysis
OCEAN RIG UDW (ORIG): Free Stock Analysis
STONE ENERGY CP (SGY): Free Stock Analysis
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In the last quarter, the company's earnings of $1.55 per share
increased 6.9% from $1.45 per share earned in the year-ago
quarter. The improvement came on the back of increased
utilization, rising customer demand as well as new rigs joining
the fleet. The results also surpassed the Zacks Consensus
Estimate of $1.50.
Factors to Consider This Quarter
Ensco Plc - a leading supplier of offshore contract drilling
services - is well positioned to improve its earnings and
revenues in the foreseeable future. It will also benefit from a
recovery in oil-directed drilling, having transformed from a Gulf
of Mexico (GoM) company to a relatively pure international play.
Ensco has $11 billion of contract revenue backlog (excluding
bonus opportunities) that gives it an excellent cash flow
However, the deepwater rigs are expected to have increased
downtime in 2013 that will affect its revenues. Further, the
challenges in contracting rigs for extension in Brazil also raise
In the near term, the increased supply of high-spec rigs is
likely to put pressure on utilization for standard jackups in the
long run. Again, the company's execution ability with respect to
the jackups under construction will play a big role in deciding
its growth. The company currently has 8 additional rigs under
Our proven model does not conclusively show that Ensco is likely
to beat the Zacks Consensus Estimate in the third quarter. This
is because a stock needs to have both a positive Earnings ESP and
a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for
this to happen. Unfortunately, this is not the case here as
Zacks ESP: The earnings ESP for the stock is -2.40%.
Zacks Rank: Ensco's Zacks Rank #4 (Sell) when combined with a
-2.40% ESP indicates that Ensco is likely to miss the earnings
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions.
Other Stocks to Consider
Here are some companies you may want to consider as our model
shows that these have the right combination of elements to post
an earnings beat this quarter:
Ocean Rig UDW Inc.
), earnings ESP of +100.00% and a Zacks Rank #1 (Strong Buy).
Legacy Reserves Lp
), earnings ESP of +15.15% and a Zacks Rank #1 (Strong Buy).
Stone Energy Corp.
), earnings ESP of +6.76% and a Zacks Rank #1 (Strong Buy).