Occidental Petroleum (OXY) Q3 Earnings: What To Expect?

Occidental Petroleum Corporation OXY will release third-quarter 2017 financial results after the market closes on Nov 1. In second quarter, the oil and gas company reported a positive earnings surprise of 25%. Let’s see how things are shaping up at the company prior to this announcement.

Factors to Consider

Occidental Petroleum expects one-time impact of Hurricane Harvey on its performance.  Due to the hurricane, third-quarter pre-tax income is expected to be down $70 million while Permian Resources daily production is likely to reduce nearly 1,000 barrels of oil equivalent (boe) per day. Occidental Petroleum initially expected Permian volumes to be in the range between 138,000 and 143,000 boe/d.  

Per the Zacks Consensus Estimate, average daily production is expected to be 607,000 boe/d, reflecting year-over-year and sequential growth of 0.3% and 1%, respectively. This is within Occidental Petroleum’s expectation of 600,000 to 610,000. Domestic production is the major contributor to the company’s daily production volumes which was impacted by the outages caused by the hurricane.

The Zacks Consensus Estimate for total revenues and earnings for the quarter stand at $3,146 million and 11 cents, respectively, reflecting a sequential decline of 12.7% and 26.7%.

Occidental Petroleum Corporation Price and EPS Surprise
 

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

Earnings Whispers

Our proven model does not show that Occidental Petroleum is likely to beat estimates this quarter. That 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 not the case here, as you will see below.

Zacks ESP: Occidental Petroleum has an Earnings ESP of -1.14%.
 
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Though Occidental Petroleum’s Zacks Rank #3 increases the predictive power of the ESP, its negative ESP makes surprise prediction difficult.

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.

Stocks to Consider
                    
Occidental Petroleum does not have the right parameters to come out with earning surprise this season. However, 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.

Cheniere Energy, Inc. LNG has an Earnings ESP of +2,500.00% and a Zacks Rank #3. It is expected to report third-quarter 2017 earnings on Nov 14. You can see the complete list of today’s Zacks #1 Rank stocks here.

Denbury Resources Inc. DNR is expected to report third-quarter 2017 earnings on Nov 7. It has an Earnings ESP of +11.11% and a Zacks Rank #2.

Enterprise Product Partners L.P. EPD is expected to report third-quarter 2017 earnings on Nov 2. It has an Earnings ESP of +1.22% and a Zacks Rank #3.

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Enterprise Products Partners L.P. (EPD): Free Stock Analysis Report
 
Denbury Resources Inc. (DNR): Free Stock Analysis Report
 
Cheniere Energy, Inc. (LNG): Free Stock Analysis Report
 
Occidental Petroleum Corporation (OXY): Free Stock Analysis Report
 
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