We expect Occidental Petroleum Corporation OXY to beat earnings estimates when it releases fourth-quarter 2017 financial results after the market closes on Feb 13. In the third quarter, the oil and gas company delivered a positive earnings surprise of 63.64%.
Why a Likely Surprise?
Our proven model shows that Occidental Petroleum is likely to beat estimates 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. This is the case here, as you will see below.
Occidental Petroleum Corporation Price and EPS Surprise
Zacks ESP : Occidental Petroleum has an Earnings ESP of +1.63%.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank : Occidental Petroleum's Zacks Rank #1 when combined with the positive ESP, increases the possibility of earnings surprise.
Note that 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.
Factors to Consider
Occidental Petroleum expects Permian Resources volumes to be 30% higher than the fourth-quarter 2016 levels, primarily due to the four rigs added in the region during mid-2017.
The Zacks Consensus Estimate for average daily production is 635,000 barrels of oil equivalent per day (boe/d), reflecting year-over-year and sequential growth of 4.6% and 5.8%, respectively. This is within Occidental Petroleum's expectation of 633,000 to 641,000 boe/d. The company will also benefit from the improving oil prices .
Contribution from its Chemical segment is expected to be $190 million in the fourth quarter, down sequentially due to seasonality in the business.
The Zacks Consensus Estimate for total revenues and earnings for the quarter stand at $3,504 million and 39 cents, respectively, reflecting sequential growth of 12.8% and 116.7%.
Other Stocks to Consider
Occidental Petroleum is not the only company with the right parameters to come out with earning surprise this season. We have a few players in the Zacks Oil and Energy sector , which have the right combination of elements to post an earnings beat this quarter.
EOG Resources Inc. EOG has an Earnings ESP of +4.06% and Zacks Rank 1. It is expected to report fourth-quarter 2017 earnings on Feb 27. You can see the complete list of today's Zacks #1 Rank stocks here .
Ecana Corporation ECA has an Earnings ESP of +2.04% and Zacks Rank 3. It is expected to report fourth-quarter 2017 earnings on Feb 15.
Apache Corporation APA has an Earnings ESP of +0.22% and Zacks Rank 3. It is expected to report fourth-quarter 2017 earnings on Feb 22.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.