Range Resources Corporation ( RRC ) is set to report first quarter 2014 results on Apr 28 after the market closes. Last quarter, the company had posted an earnings surprise of -7.69%. Let's see how things are shaping up for this announcement.
Factors to ConsiderThis Quarter
Independent oil and gas company, Range Resources' diversified asset portfolio is spread between low-risk/long reserve-life Appalachian assets and large-volume/rapid-payout Gulf Coast properties. The company has an impressive inventory in the Marcellus Shale, one of the prominent emerging shale plays in the U.S. lower 48 states.
In 2013, Marcellus Shale well results continued to show improvement from both a production and a cost perspective and output averaged 968 million cubic feet equivalent per day (MMcfe/d), up 37% from the prior year.
For the first quarter of 2014, the company targets production growth of 20-25% year over year. Production is anticipated at 1.05 Bcfe per day, of which liquids is likely to comprise only 30-35%. As such the company remains susceptible to volatile natural gas prices which could hurt the company's volumes and margins.
Our proven model does not conclusively show that Range Resources is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #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 Range Resources is 0.00% since the Most Accurate estimate stands at 38 cents, in line with the Zacks Consensus Estimate.
Zacks Rank: Range Resources' Zacks Rank #1 (Strong Buy) has little effect on the predictive power of ESP because the Zacks Rank #1 when combined with a 0.00% ESP makes surprise prediction difficult.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Pioneer Energy Services Corp. ( PES ) has an earnings ESP of +40.00% and holds a Zacks Rank #1. Pioneer Energy Services Partners will report first quarter earnings on Apr 29.
Phillips 66 Partners L.P. ( PSXP ) has an earnings ESP of +14.82% and holds a Zacks Rank #1. Phillips 66 Partners will report first quarter earnings on Apr 30.
Unit Corp. ( UNT ) has an earnings ESP of +1.80% and holds a Zacks Rank #1. Unit Corp. will report first quarter earnings on May 8.