Upstream energy firm Cabot Oil & Gas CorporationCOG is set to release third-quarter 2015 financial results before the opening bell on Oct 23.
In the last reported quarter, the company failed to meet the Zacks Consensus Estimate by 2 cents. Notably, Cabot missed estimates in three of the trailing four quarters. Let's see how things are shaping up for this announcement.
Factors to Consider
Cabot Oil & Gas' diversified asset portfolio is spread between low-risk/long reserve-life Appalachian assets and large-volume/rapid-payout Gulf Coast properties. This results in a broad mix of production and payout profiles, reducing the risk profile.
Also, Cabot has hedged a considerable portion of its projected 2015 natural gas production at very attractive prices. This lowers the company's near-term commodity-price exposure, which is a key positive for Cabot's risk profile, given current market concerns.
However, Cabot has projected lower-than-expected production volumes for the third quarter. Also, continued weakness in commodity prices, in the face of rising costs, has pressured margins for the firm.
Additionally, the majority of brokerage firms have lowered estimates for both the third quarter as well as full year, suggesting further bearishness ahead.
Earnings Whispers
Our proven model does not conclusively show that Cabot Oil & Gas is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%.
Zacks Rank: Cabot Oil & Gas has a Zacks Rank #3 (Hold). Though a Zacks Rank #3 increases the predictive power of ESP, the company's ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Exterran Partners LP EXLP has Earnings ESP of +19.23% and a Zacks Rank #1 (Strong Buy). The company is expected to release earnings on Nov 3.
Matrix Service Co. MTRX has Earnings ESP of +12.90% and a Zacks Rank #1. The company is likely to release earnings on Nov 4.
Natural Gas Services Group Inc. NGS has Earnings ESP of +21.05% and a Zacks Rank #1. The company is anticipated to release earnings on Nov 5.
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CABOT OIL & GAS (COG): Free Stock Analysis Report
MATRIX SERVICE (MTRX): Free Stock Analysis Report
EXTERRAN PTNRS (EXLP): Free Stock Analysis Report
NATURAL GAS SVC (NGS): Free Stock Analysis Report
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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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
