Will Noble (NBL) Beat Earnings Estimates This Quarter? - Analyst Blog


We expect oil and gas exploration as well as production operator, Noble Energy Inc. ( NBL ) to surpass our expectation in its second quarter, results of which are scheduled to be released before the market bell on Jul 25, 2013.

Why a Likely Positive Surprise?

Our proven model shows that Noble Energy is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method ), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +4.17%. This is a very meaningful and leading indicator of a likely positive earnings surprise for the shares.

Zacks Rank #3 (Hold): Note that stocks with Zacks Ranks of #1, 2 and 3 have a significantly higher chance of beating earnings. The Sell rated stocks (#4 and 5) should never be considered going into an earnings announcement.  

The combination of Noble Energy's Zacks Rank #3 (Hold) and +4.17% ESP makes us confident of a positive earnings beat on Jul 25.

What is Driving the Better Than Expected Earnings?

The operational start-up of the Swordfish block in the Gulf of Mexico and continual growth in the Denver/Julesburg (DJ) and Marcellus horizontal programs will boost production and act as a key earnings driver for Noble Energy.

The increased demand for natural gas in Israel will ramp up the company's gas sales from its Tamar play in Eastern Mediterranean especially in the peak summer season.

The last two quarters saw positive earnings surprises, which led to an average beat of 36.6%. We believe Noble Energy's aggressive efforts to expand its exploration options will help retain its good run. 

Other Stocks to Consider

Noble Energy is not the only firm looking up this earnings season. We also see likely earnings beats coming from these three industry peers:

Memorial Production Partners LP. ( MEMP ), Earnings ESP of +19.51% and Zacks Rank #1 (Strong Buy).

Carrizo Oil & Gas, Inc. ( CRZO ), Earnings ESP of +5.56% and Zacks Rank #2 (Buy).

EXCO Resources, Inc. ( XCO ), Earnings ESP of +9.09% and Zacks Rank #2 (Buy).

CARRIZO OIL&GAS (CRZO): Free Stock Analysis Report

MEMORIAL PRODUC (MEMP): Free Stock Analysis Report

NOBLE ENERGY (NBL): Free Stock Analysis Report

EXCO RESOURCES (XCO): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CRZO , MEMP , NBL , XCO



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