CONSOL EnergyCNX is slated to report third-quarter 2017 financial results before the market opens on Oct 31. The diversified fuel company delivered a negative earnings surprise of 70% in the last quarter. Let's see how things are shaping up for this earnings season.
Factors to Consider
CONSOL Energy expects its Exploration & Production (E&P) division production to be 100 billion cubic feet equivalent (Bcfe) in the third quarter reflecting a marginal sequential drop. The company also lowered its 2017 E&P production guidance to 405-415 Bcfe from 420-440 Bcfe, taking into account operational issues, tightening of availability of field services and increasing cycle time for larger ceramic completion design.
Per the Zacks Consensus Estimate, sales price per thousand cubic feet (Mcf) of gas in the third quarter is expected to be $2.18 per Mcf, which reflects a year-over-year decline of 7.6% and a sequential drop of 0.9%. The fall in expected production and realized price will adversely impact total revenues of CONSOL Energy. The Zacks Consensus Estimate for total revenues in the quarter is $617 million, reflecting a sequential drop of 28.8%.
A marginal decrease in coal production from its coal mines due to permission delays and drop in the realized prices of coal per ton due to cooler-than-normal summer and modest delivery issues due to railroads will adversely impact third-quarter results.
CONSOL Energy Inc. Price and EPS Surprise
Our proven model does not conclusively show that CONSOL Energy is likely to beat earnings this quarter as it does not possess the key components. 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. However, that is not the case here as you will see below.
Zacks ESP: The company's Earnings ESP is 0.00%.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank : CONSOL Energy has a Zacks Rank #4 (Sell).
Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks With Favorable Combination
One can consider a few other companies from the Zacks Oil and Energy Sector that have the right combination of elements to post an earnings beat this quarter.
Apache Corporation APA has an Earnings ESP of +106.77% and a Zacks Rank #3. It is expected to report third-quarter 2017 earnings on Nov 2. You can see the complete list of today's Zacks #1 Rank stocks here .
Cenovus Energy Inc. CVE has an Earnings ESP of +40.00% and a Zacks Rank #2. It is expected to report third-quarter earnings on Nov 2.
Newpark Resources Inc. NR has an Earnings ESP of +33.33% and a Zacks Rank #2. It is expected to report third-quarter earnings on Oct 30.
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