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Loews (L): Is a Surprise in Store this Earnings Season?

Loews CorporationL is set to report fourth-quarter 2015 results on Feb 8, before the market opens. Last quarter, the company posted a negative earnings surprise of 15.25%. Let's see how things are shaping up for this announcement.

Factors Influencing This Past Quarter

The effect of lowered exploration and production budgets, influx of new rig deliveries and weak oil prices are likely to have kept Diamond Offshore's DO results under pressure. Moreover, soft ultra-deepwater and deepwater markets, competitive market conditions resulting in lesser insured exposure and lower rates may also weigh on the upcoming results.

A soft interest rate environment may have also come in the way of the desired performance.

However, Boardwalk Pipeline BWP remained focused on ramping up its organic growth projects supported by long-term contracts. Also, Loews Hotels did not budge from its target of tripling net income by 2015. Also, better performance at the commercial business of CNA Financial CNA is likely to have lent some support to the fourth quarter.

An added boost to the bottom line is expected from continued share buyback.

Earnings Whispers

Our proven model does not conclusively show that Loews 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, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP : The Earnings ESP for Loews is -5.13%. This is because while the Most Accurate estimate stands at 74 cents, the Zacks Consensus Estimate is pegged higher at 78 cents.

Zacks Rank : Loews has a Zacks Rank #2 (Buy). A favorable Zacks Rank increases the predictive power of ESP, but we need a positive ESP to be sure of a likely surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

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BOARDWALK PIPLN (BWP): Free Stock Analysis Report

LOEWS CORP (L): Free Stock Analysis Report

CNA FINL CORP (CNA): Free Stock Analysis Report

DIAMOND OFFSHOR (DO): 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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