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A Peek into Oil Stocks Reporting Earnings on May 6: BPL, EEQ

We have reached the final stretch of the Q1 earnings season with results from 374 S&P 500 members that combined account for almost 75% of the index’s total market capitalization.

Total earnings for these companies are down 7.5% from the same period last year on 1.9% lower revenues, with 71.4% positive earnings surprises and 56.4% beating revenue estimates. (Data from the Zacks Earnings Trends report dated May 4, 2016). The positive surprises have undoubtedly been aided by easy-to-beat estimates and a waning greenback.

Energy: A Drag but Not as Bad as Thought

Expectedly, the ‘Energy’ sector has been a big drag on the aggregate growth picture. This is not surprising, considering that oil plunged to as low as $26-per-barrel in February, in the process pushing down estimate estimates. For the sector components on the S&P 500 index that have reported Q1 results, total earnings are down 99.6% on 29.2% lower revenues.

But the Energy sector’s results are so far better than expected, with 59.3% of companies beating earnings estimates and the revenue beat ratio – at 48.1% – being not as bad as initially feared.

We have seen sub-standard reports from a number of major players in the sector, like Chevron Corp. CVX, Schlumberger Ltd. SLB and Valero Energy Corp. VLO.

At the same time, there are many oil behemoths – like Exxon Mobil Corp. XOM, Royal Dutch Shell plc RDS.A and Halliburton Co. HAL – that posted striking earnings beats.

Get Ready for 2 Releases Tomorrow

Let’s have a look at how two companies from the sector are poised ahead of their scheduled earnings announcements tomorrow:

One of the largest independent common carriers of refined petroleum products in the U.S. in terms of volume delivered, Buckeye Partners L.P. BPL, is set to release first-quarter 2016 results before the opening bell. For the quarter to be reported, Buckeye Partners has an Earnings ESP of -2.86%. This is because the Most Accurate estimate stands at $1.02, while the Zacks Consensus Estimate is pegged higher, at $1.05. The stock holds a Zacks Rank #4 (Sell), which along with a negative ESP, makes surprise prediction difficult. Coming to earnings the surprise history, Buckeye Partners has a mixed track of having beaten estimates in two of the last four quarters, resulting in an average negative surprise of 1.19%.

Enbridge Energy Management LLC EEQ – a publicly traded limited liability company managing the business of an energy partnership – will also come up with first-quarter results tomorrow. The company has an Earnings ESP of 0.00%, with both the Most Accurate Estimate and the Zacks Consensus Estimate pegged at 14 cents. Enbridge Energy Management carries a Zacks Rank #3 (Hold), which combined with a 0.00% ESP, again makes surprise prediction difficult. Coming to the earnings surprise history, the company has a dismal track record. It missed estimates in a big way in two of the last four quarters, resulting in an average negative surprise of 758.40%.

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ENBRIDGE ENERGY (EEQ): Free Stock Analysis Report
 
BUCKEYE PARTNRS (BPL): Free Stock Analysis Report
 
VALERO ENERGY (VLO): Free Stock Analysis Report
 
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
 
HALLIBURTON CO (HAL): Free Stock Analysis Report
 
CHEVRON CORP (CVX): Free Stock Analysis Report
 
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report
 
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
 
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