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Why the Earnings Streak Continue for Cabot Oil & Gas Corporation (COG)? - Tale of the Tape

Posted
12/26/2013 8:17:00 AM
By: Zacks.com
Referenced Stocks:COG

Looking for a stock that might be in a good position to beat earnings at its next report? Consider Cabot Oil & Gas Corporation ( COG ) , a firm in the oil & gas industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, COG has beaten estimates by at least 10% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, COG expected to earn 16 cents per share, while it actually produced earnings of 21 cents per share, a beat of 31.2%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 14 cents per share, when it actually saw earnings of 16 cents per share instead, representing a 14.3% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for Cabot Oil & Gas Corporation. In fact, the Earnings ESP for COG is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company's earnings prospects. This is the case for COG, as the firm currently has a Zacks Earnings ESP of 1.56%, so another beat could be around the corner.

This is particularly true when you consider that COG has a great Zacks Rank #2 (Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that COG could see another beat at its next report, especially if recent trends are any guide.

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