Oil and gas producer
Range Resources Corp.
) is set to release its second quarter 2014 results after the
closing bell on Monday, Jul 28.
In the preceding three-month period, Range Resources delivered a
positive 5.26% earnings surprise - the third outperformance in the
last 4 quarters - buoyed by a rise in volumes. Let's see how things
are shaping up for this announcement.
Factors to Consider This Quarter
Range Resources' diversified asset portfolio is spread between
low-risk/long reserve-life Appalachian assets and
large-volume/rapid-payout Gulf Coast properties. The company has an
impressive inventory in the Marcellus Shale, one of the prominent
emerging shale plays in the U.S. lower 48 states.
Last year, Marcellus Shale well results continued to show
improvement from both a production and a cost perspective and
output averaged 968 million cubic feet equivalent per day
(MMcfe/d), up 37% from the prior year.
For the second quarter of 2014, the company targets production
growth between 1,065 and 1,075 MMcfe/d, of which natural gas is
likely to comprise as much as 65-70%. As such Range Resources
remains susceptible to volatile
, which could hurt the company's volumes and margins.
Our proven model does not conclusively show that Range Resources
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive
(Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for
this to happen. Unfortunately, this is not the case here, as
Range Resources' earnings ESP is 0.00%, as the Most Accurate
estimate and the Zacks Consensus Estimate both stand at 37
Range Resources carries a Zacks Rank #3 (Hold), which when combined
with a 0.00% ESP makes surprise prediction difficult. 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 momentum.
Stocks to Consider
While earnings beat looks uncertain for Range Resources, here
are some energy firms 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:
Mid-Con Energy Partners L.P. (
) has an Earnings ESP of +8.89% and holds a Zacks Rank #1 (Strong
Newfield Exploration Co. (
) has an Earnings ESP of +2.00% and holds a Zacks Rank #1.
Whiting Petroleum Corp. (
) has an Earnings ESP of +3.18% and holds a Zacks Rank #2
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RANGE RESOURCES (RRC): Free Stock Analysis
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WHITING PETROLM (WLL): Free Stock Analysis
MID-CON ENERGY (MCEP): Free Stock Analysis
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