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Oil Stocks to Watch in Q2 Earnings: APC, RRC, VLO & Others


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With the Q2 earnings season in full swing and many of the oil majors scheduled to report their results this week, investors are keen to note how these companies perform. A study of estimated figures of the companies reporting their earnings shows a modest improvement from the exceptionally weak levels in the last couple of quarters. However, growth for the benchmark S&P 500 index is likely to be negative for the fifth quarter in a row. Nine of the 16 Zacks sectors (as of Jul 22) are projected to underperform.

So far, the 126 S&P 500 members that have released their Q2 results account for a total of 32.7% of the index's market capitalization. Total earnings for these 126 companies are down 1.1% year over year due 2.6% lower revenues. Of these, 70.6% beat earnings per share (EPS) estimates and 55.6% surpassed top-line expectations.

Per the Earnings Trend report , the general outlook for energy sector remains bearish as it is expected to register a massive 78.7% year-over-year decrease in earnings due to a 25.4% plunge in revenues. Excluding the impact of the energy sector, the S&P 500 index would witness earnings growth of 0.1%.

However, it remains to be seen how oil majors Hess Corp HES , ConocoPhillips COP and ExxonMobil Corp XOM perform when they report Q2 results later this week.

Meanwhile, let's have a look at how some of these other energy companies are poised ahead of the scheduled announcements.

Flotek Industries Inc. FTK is expected to release Q2 results on Jul 26, after the market closes . Our proven model does not conclusively show that Flotek Industries is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. The company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stands at a loss of 8 cents. The company has a Zacks Rank # 3 but a 0.00% Earnings ESP makes surprise prediction difficult.

FLOTEK INDU INC Price and EPS Surprise

FLOTEK INDU INC Price and EPS Surprise | FLOTEK INDU INC Quote

Gulfmark Offshore, Inc GLF is set to release Q2 results on Jul 27, after the market closes. Gulfmark Offshore has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stands at a loss of 56 cents. The company has a Zacks Rank # 3 but a 0.00% Earnings ESP makes surprise prediction difficult.

GULFMARK OFFSHR Price and EPS Surprise

GULFMARK OFFSHR Price and EPS Surprise | GULFMARK OFFSHR Quote

McDermott International Inc MDR is slated to release Q2 results on Jul 26, after the market closes. Our proven model does not conclusively show that Flotek Industries is likely to beat on earnings this quarter.  Both the Most Accurate estimate and the Zacks Consensus Estimate stands at 2 cents. The company and Zacks Rank #2 but a 0.00% Earnings ESP makes surprise prediction difficult.

MCDERMOTT INTL Price and EPS Surprise

MCDERMOTT INTL Price and EPS Surprise | MCDERMOTT INTL Quote

Oil States International Inc. OIS is expected to release Q2 numbers on Jul 26. Oil States International has an Earnings ESP of -3.70% as the Most Accurate estimate is pegged at a loss 28 cents, while the Zacks Consensus Estimate stands at a loss 27 cents. The company has a Zacks Rank # 3 but a negative Earnings ESP makes surprise prediction difficult.

OIL STATES INTL Price and EPS Surprise

OIL STATES INTL Price and EPS Surprise | OIL STATES INTL Quote

Anadarko Petroleum Corporation APC is expected to report Q2 earnings on Jul 26. The company has an Earnings ESP of +1.30% and a Zacks Rank #2.

ANADARKO PETROL Price and EPS Surprise

ANADARKO PETROL Price and EPS Surprise | ANADARKO PETROL Quote

Given that APC has a favorable Zacks Rank and a positive Earnings ESP investors might want to consider this stock ahead of earnings. Clearly, recent earnings estimate revisions raise optimism for the stock. (Read more: Is a Surprise Coming for Anadarko Petroleum This Earnings Season? )

Range Resources Corporation RRC is slated to release Q1 results on Jul 26, after the market closes. The company has an Earnings ESP of -17.24% and Zacks Rank #2. Though a favorable Zacks Rank increases the predictive power of ESP, the company's negative Earnings ESP makes surprise prediction difficult.

RANGE RESOURCES Price and EPS Surprise

RANGE RESOURCES Price and EPS Surprise | RANGE RESOURCES Quote

In the last quarter, the company's adjusted loss came in at 22 cents a share, narrower than the Zacks Consensus Estimate of a loss of 26 cents. The company reported earnings of 12 cents a share in the year-earlier quarter. (Read more: Can Range Resources Surprise this Earnings Season? )

Valero Energy Corporation VLO is set to release Q2 results on Jul 26. The company has a Zacks Rank #5 and an Earnings ESP of 0.00%. Note that we caution against Sell-rated stocks (Zacks Rank #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

VALERO ENERGY Price and EPS Surprise

VALERO ENERGY Price and EPS Surprise | VALERO ENERGY Quote

In the preceding three-month period, the North American independent refiner and marketer of petroleum products delivered a negative earnings surprise of 17.81%. The underperformance is attributable to a sharp decline in activity and the ongoing pricing pressure as exploration and production companies further adjust their spending to combat the freefall in commodity prices. (Read more: Valero Q2 Earnings May Disappoint: Stock to Suffer? )

Don't miss out on our full earnings release articles for these two oil refining stocks, as the actual results might hold some surprises!

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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

MCDERMOTT INTL (MDR): Free Stock Analysis Report

OIL STATES INTL (OIS): Free Stock Analysis Report

VALERO ENERGY (VLO): Free Stock Analysis Report

GULFMARK OFFSHR (GLF): Free Stock Analysis Report

FLOTEK INDU INC (FTK): Free Stock Analysis Report

EXXON MOBIL CRP (XOM): Free Stock Analysis Report

RANGE RESOURCES (RRC): Free Stock Analysis Report

ANADARKO PETROL (APC): Free Stock Analysis Report

HESS CORP (HES): Free Stock Analysis Report

CONOCOPHILLIPS (COP): Free Stock Analysis Report

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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: Business , Investing , Earnings , Stocks
Referenced Symbols: MDR , OIS , VLO , GLF , FTK


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