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Occidental (OXY) Q3 Earnings: What's in Store for the Stock?

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Occidental Petroleum CorporationOXY to report third-quarter 2018 earnings on Nov 5, after the market closes . In the second quarter, the oil and gas company witnessed a negative earnings surprise of 12%.

However, the company's bottom line beat the Zacks Consensus Estimate in three of the last four quarters, the average being 20.93%.

Let's see, how things are shaping up at the company prior to this announcement.

Occidental Petroleum Corporation Price and EPS Surprise

Occidental Petroleum Corporation Price and EPS Surprise | Occidental Petroleum Corporation Quote

Factors to Consider

Occidental Petroleum expects third-quarter total production to be in the range of 665,000-687,000 barrels of oil equivalent per day (boe/d) and Permian Resources output within 215,000-225,000 boe/d. This raised production guidance provided by the company is driven by a strong execution and productivity.

Occidental Petroleum executed a strategic initiative to divest its lower-margin, lower-return oil and gas production with a plan for replacement by higher-margin, higher-return production from the Permian Resources business. The company estimates to monetize $2.6 billion of non-core domestic midstream asset by third-quarter 2018. Divestment of non-core assets will lower the company's operating and maintenance expenses, thereby aiding to its earnings growth.

The consensus mark for total revenues and earnings in the quarter under review stands at $4,661 million and $1.51 per share, respectively, reflecting a surge of 50.1% and 738.9% each, from the year-ago quarter's tally.

Earnings Whispers

Our proven model does not conclusively show that Occidental Petroleum is likely to beat on earnings this reporting season. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Occidental Petroleum has an Earnings ESP of -0.37%. This is because the Most Accurate Estimate is pegged at $1.50 per share while the Zacks Consensus Estimate stands at $1.51.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Occidental Petroleum carries a Zacks Rank #2, which increases the predictive power of ESP. However, the company needs a solid ESP to be confident about an earnings surprise. Thus, this combination leaves surprise prediction inconclusive.

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

Stocks to Consider

We have a few following players worth considering in the Zacks Oil and Energy sector with the right combination of elements to beat on earnings this time around:

Hess Corporation HES has an Earnings ESP of +61.91% and a Zacks Rank of 2. It is expected to report third-quarter 2018 earnings on Oct 31. You can see the complete list of today's Zacks #1 Rank stocks here .

Apache Corporation APA has an Earnings ESP of +4.85% and is a Zacks #2 Ranked stock. The company is expected to report third-quarter 2018 earnings on Oct 31.

Keane Group, Inc. FRAC has an Earnings ESP of +5.24% and a Zacks Rank #3. It is expected to report third-quarter 2018 earnings on Oct 31.

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Keane Group, Inc. (FRAC): 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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