Cimarex (XEC) to Report Q2 Earnings: What's in the Cards?

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Cimarex Energy Co. XEC is set to release second-quarter 2018 results on Aug 7, after the closing bell.

In the last reported quarter, the upstream energy player posted a positive earnings surprise of 7.06%. Moreover, the company has an average positive earnings surprise of 9.19% in the last four quarters.

Cimarex Energy Co Price and EPS Surprise

Cimarex Energy Co Price and EPS Surprise | Cimarex Energy Co Quote

Which Way Are the Estimates Treading?

Let's take a look at the estimate revision trend to get a clear picture of analyst opinion on the stock before the earnings release.

The Zacks Consensus Estimate of $1.65 for second-quarter 2018 earnings has been revised upward over the last 30 days, with 10 firms being bullish and three firms adopting a bearish stance. The figure reflects a year-over-year improvement of 55.7%.

Further, analysts polled by Zacks expect revenues of $556.93 million, showing an increase of 22% from the year-ago quarter.

Factors Likely to Affect Results

Cimarex is a leading upstream energy player with prime focus on the prospective Anadarko and Permian Basins.

Per the Zacks Consensus Estimate, the company's production for the second quarter is pegged at 1,241 million cubic feet of gas equivalent per day (MMcfe/D), indicating a rise from 1,156MMcfe/D in the year-earlier quarter.  

Per the Zacks Consensus Estimate, average realized natural gas price is expected to decline 14% and 30.5% from the preceding quarter and the year-ago quarter to $1.96 per thousand cubic feet (mcf), respectively.

Per the Zacks Consensus Estimate, average realized oil price is projected to decline 1.7% and 33.7% from the preceding quarter and the year-ago quarter to $59 per barrel, respectively.

Per the Zacks Consensus Estimate, average realized natural gas liquids price is projected to improve 8.4% and 20% from the preceding quarter and the year-ago quarter to $21.89 per barrel, respectively.

It is to be noted that a significant portion of the company's production comprise natural gas. Although the gas equivalent production is expected to increase, the price realization for the commodity is likely to decline.

Earnings Whispers

Our proven model does not show a beat for Cimarex this earnings season. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Earnings ESP : Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.60%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .      

Zacks Rank : Cimarex carries a Zacks Rank #3.

Conversely, Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.

Q2 Price Performance

During the quarter, the company's shares gained 8.8% compared with the industry 's 12.5% rally.

Stocks to Consider

Here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.

Cheniere Energy, Inc LNG , based in Houston, is engaged in businesses related to liquefied natural gas. The company has an Earnings ESP of +5.25% and flaunts a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Crude oil and refined products logistics and marketing assets are owned, operated, purchased and constructed by Delek Logistics Partners L.P. DKL . The partnership has an Earnings ESP of +0.63% and a Zacks Rank #2.

Occidental Petroleum Corporation OXY is an international oil and gas exploration and production company. The company has an Earnings ESP of +1.75% and carries a Zacks Rank #2.

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

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: DKL , XEC , LNG , OXY

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