Is a Beat in Store for Noble Corp (NE) This Earnings Season?

Shutterstock photo

Noble Corporation plc NE is scheduled to release second-quarter 2018 results on Aug 2, after the closing bell.

The offshore drilling contractor beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 5.2%. We expect the company to report a beat this earnings season. 

Noble Corporation Price and EPS Surprise

Noble Corporation Price and EPS Surprise | Noble Corporation Quote

Why a Positive Surprise?

Our proven model shows that Noble is likely to beat estimates this quarter as the stock has the right combination of the two key ingredients for this to happen - a positive  Earnings ESP  and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP:  Noble has an Earnings ESP of +0.61%. You can uncover the best stocks to buy or sell before they're reported with our  Earnings ESP Filter .

Zacks Rank:  The stock carries a Zacks Rank #3, which increases the predictive power of ESP. The combination of Noble's favorable Zacks Rank and positive ESP makes us reasonably confident of an earnings beat this season.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors to Consider

For the month of April, May and June of 2018, the average West Texas Intermediate (WTI) crude price was reported at a respective $66.25 per barrel, $69.98 and $67.87 - significantly higher than the year-ago monthly prices of $51.06, $48.48 and $45.18. Price data has been taken from the U.S. Energy Information Administration (EIA) .

Over the past three years, the average monthly crude pricing scenario through second-quarter 2018 was the healthiest, thanks to supply concerns emanating from Venezuela and Iran amid a robust domestic economy.

Natural gas has also fared well as the price of the commodity rose almost 8% through the April-to-June quarter of 2018.

The favorable oil and gas prices primarily supported the offshore drilling activities. Through the April-to-June quarter of 2018, the count of offshore rig increased from 12 to 19, per data by Baker Hughes, a GE company BHGE .

Other Stocks to Consider

Here are some other 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.

Murphy Oil Corporation MUR has an Earnings ESP of +5.99% and a Zacks Rank #2. The company is set to report second-quarter results on Aug 8, after the closing bell. You can see  the complete list of today's Zacks #1 Rank stocks here .

Occidental Petroleum Corporation OXY has an Earnings ESP of +1.75% and a Zacks Rank #2. The firm is expected to release earnings on Aug 8, after the closing bell.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Noble Corporation (NE): Free Stock Analysis Report

Occidental Petroleum Corporation (OXY): Free Stock Analysis Report

Murphy Oil Corporation (MUR): Free Stock Analysis Report

Baker Hughes, a GE company (BHGE): 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 Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: NE , OXY , MUR , BHGE

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?