Major oilfield services provider
) is set to release its third quarter results before the opening
bell on Monday, Oct 21.
In the preceding three-month period, Halliburton delivered a
positive 1.39% earnings surprise - the fifth outperformance in
the last 6 quarters - helped by robust performance from its
international business. Let's see how things are shaping up prior
to this announcement.
Factors to Consider This Quarter
Halliburton's international operations are showing signs of
gradual improvement, with growth opportunities aplenty in Middle
East, Russia and Asia.
However, this is more than negated by the sluggishness in
Halliburton's core U.S. segment.
In particular, the North American land rig count remained flat
over the third quarter, as growth in highly-productive horizontal
drilling has led to a natural gas supply overhang and relatively
weak natural gas prices in the U.S. market. This has been only
partially offset by the continued growth of oil- and liquids-rich
A slowdown in North American onshore activity levels impairs
Halliburton's business, as the company is heavily leveraged to
the region through its market-share-leading pressure-pumping
Our proven model does not conclusively show that Halliburton
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen.Unfortunately
this is not the case here as elaborated below.
Negative Zacks ESP:
This is because the Most Accurate estimate stands at 82 cents,
while the Zacks Consensus is higher at 83 cents. This results in
a difference of -1.21%.
Zacks Rank #3 (Hold):
Halliburton's Zacks Rank #3 (Hold), 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.
We caution against stocks with Zacks Rank #4 and 5 (Sell rated
stocks) going into the earnings announcement, especially when the
company is seeing a negative estimate revisions momentum.
Stocks to Consider
While an earnings beat looks unlikely for Halliburton, 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:
Matador Resources Co.
), with Earnings ESP of +34.48% and a Zacks Rank #1 (Strong
Whiting Petroleum Corp.
), with Earnings ESP of +7.00% and a Zacks Rank #2 (Buy).
Swift Energy Co.
), with Earnings ESP of +68.75% and a Zacks Rank #2 (Buy).
HALLIBURTON CO (HAL): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
SWIFT ENERGY CO (SFY): Free Stock Analysis
WHITING PETROLM (WLL): Free Stock Analysis
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