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Oil Stocks Q4 Earnings Slated for Jan 31: XOM, VLO, APC

The Q4 earnings season is in full swing with more and more companies reporting financial results every day. In fact, as many as 106 S&P 500 members are set to release their quarterly results this week.

So far, 170 S&P 500 members - 33.9% of the index's total market capitalization - have reported Q4 results. Per the Earnings Trends report (dated Jan 27, 2017), total earnings for these companies increased 6% due to 3.1% growth in revenues, both on a year-over-year basis. While 64.1% companies beat on earnings estimates, 54.7% posted better-than-expected revenues.

The current earnings trend for the S&P 500 Index, however, is different. Investors should note that excluding the impact of the energy sector earnings will likely rise by 5.8%. Hence, it is evident that the energy sector has been displaying improvement during the quarter and is likely to post growth in earnings and revenues.

We note that earnings growth for the Energy sector turned positive during Q3 after five consecutive quarters of deterioration. It is a well-documented fact that the sector has been a drag on overall growth for quite some time now. However, the tide seems to have turned with 50% of the energy companies beating earnings estimates and 75% outperforming on the top-line front.

With several companies slated to report their quarterly results in the coming days we expect to get a clearer idea about the Q4 earnings cycle.

Stocks to Watch for Earnings on Jan 31

Let's see how these three energy companies are likely to fare when they come up with Q4 numbers on Tuesday, Jan 31.

ExxonMobil CorporationXOM is the world's largest publicly traded oil company. The firm is engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses. The company is expected to release its quarterly results before the opening bell.

In Q3, this Irving, TX-based oil giant posted better-than-expected earnings. Project startups as well as favorable volume and mix effects led to the outperformance.

We do not expect ExxonMobil to beat expectations in Q4. Though the company's Zacks Rank #3 (Hold) increases the predictive power of ESP, its Earnings ESP of -2.78% makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Exxon Mobil Corporation Price and EPS Surprise

Exxon Mobil Corporation Price and EPS Surprise | Exxon Mobil Corporation Quote

Per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat on earnings.

Conversely, 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.

Valero Energy CorporationVLO , the largest independent refiner and marketer of petroleum products in the U.S., is set to report Q4 earnings before the opening bell. The company is one of the major independent retailers of refined petroleum products in central and southwestern U.S. and eastern Canada.

In Q3, this San Antonio, TX-based company reported better-than-expected earnings. This was mainly attributable to lower operating expenses.

We do not expect Valero Energy to beat expectations in Q4. Though the company's Zacks Rank #3 (Hold) increases the predictive power of ESP, its Earnings ESP of 0.00% makes surprise prediction difficult.

Valero Energy Corporation Price and EPS Surprise

Valero Energy Corporation Price and EPS Surprise | Valero Energy Corporation Quote

Anadarko Petroleum CorporationAPC is set to report Q4 earnings after the closing bell. The company is primarily engaged in the exploration, development, production, gathering, processing and marketing of natural gas, crude oil, condensate and natural gas liquids. Coming to the earnings surprise history, Anadarko Petroleum has a good track record. It beat estimates in three of the last four quarters with an average positive surprise of 4.38%.

An earnings beat seems likely for Anadarko Petroleum this time around, given its a Zacks Rank #2 and Earnings ESP of +7.84%. (Read more: Anadarko Petroleum: Stock to Beat in Q4 Earnings )

Anadarko Petroleum Corporation Price and EPS Surprise

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

You can see the complete list of today's Zacks #1 Rank stocks here .

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Valero Energy Corporation (VLO): Free Stock Analysis Report

Exxon Mobil Corporation (XOM): Free Stock Analysis Report

Anadarko Petroleum Corporation (APC): 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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