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Can EOG Resources (EOG) Keep Its Earnings Streak Alive in Q4?

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EOG Resources, Inc.EOG is expected to release fourth-quarter 2017 results on Feb 28.

Last quarter, this upstream energy player delivered a positive earnings surprise of 90%. In the last four quarters, the company's average surprise was a positive 40.9%. Let's see how things are shaping up for this announcement.

Which Way Are Estimates Treading?

Let's look at the estimate revision trend in order to get a clear picture of what analysts expect from the upcoming release.

The Zacks Consensus Estimate for fourth-quarter earnings of 52 cents has remained unchanged over the last seven days. This represents a year-over-year earnings plunge of 5,300%.

Further, analysts polled by Zacks expect revenues of $3,026 million for the quarter, up almost 26% from the year-ago quarter.

EOG Resources, Inc. Price and EPS Surprise

EOG Resources, Inc. Price and EPS Surprise | EOG Resources, Inc. Quote

Why a Likely Positive Surprise?

Our proven model shows that EOG Resources is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Earnings ESP , which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.92%. This is a very meaningful and leading indicator of a likely positive earnings surprise for shares. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: EOG Resources sports a Zacks Rank #1 (Strong Buy), which when combined with +1.92% ESP makes us confident of a positive earnings surprise.

Note that stocks with a Zacks Ranks #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings. Meanwhile, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.

What Is Driving the Better-Than-Expected Earnings?

The Zacks Consensus Estimate for total Crude Oil and Condensate Volumes is pegged at 370 thousand barrels per day (MBbl/d) - within the company's projected range of 362.5-370.7 MBbl/d, higher than last quarter's 328 MBbl/d and year-ago quarter's 312 MBbl/d. The Zacks Consensus Estimate for Average Crude Oil and Condensate Prices (Composite) is $54 per barrel, above last quarter's $48.11 per barrel and the year-ago quarter's $47.76 per barrel.

The Zacks Consensus Estimate for total Natural Gas Liquids Volumes is 88 MBbl/d, higher than the year-ago 81 MBbl/d and preceding quarter's 87 MBbl/d. The Zacks Consensus Estimate for Average Natural Gas Liquids Prices (Composite) is $21.77 per barrel, higher than the year-ago quarter's $18.51 per barrel.

The Zacks Consensus Estimate for Average Natural Gas Prices (Composite) is $2.23 per thousand cubic feet (Mcf), higher than the year-ago quarter's $2.04 per Mcf.

Moreover, the Zacks Consensus Estimate for total production is 60 million barrels of oil equivalent (MMBoe), higher than last quarter's 55 MMBoe and the year-ago quarter's 53.7 MMBoe.

Hence, we expect the company to report healthy Q4 numbers on the back of higher realized commodity prices and production.

Other Stocks to Consider

Here are a few companies which, per our model, have the right combination of elements to post an earnings beat this quarter:

WildHorse Resource Development Corporation WRD , based in Houston, TX, is an upstream energy player. It has an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Houston, TX-based Oasis Petroleum Inc. OAS is also an oil explorer with an Earnings ESP of +14.28% and a Zacks Rank of 2.

Dallas, TX-based RSP Permian, Inc. RSPP is an upstream energy company with an Earnings ESP of + 0.74%. It is a Zacks #3 Ranked player.

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EOG Resources, Inc. (EOG): Free Stock Analysis Report

Oasis Petroleum Inc. (OAS): Free Stock Analysis Report

RSP Permian, Inc. (RSPP): Free Stock Analysis Report

Wildhorse Resource Development Corporation (WRD): 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.

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