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Oil Stocks Reporting Q1 Earnings Early Next Week: OAS, MUSA

With the Q1 earnings season nearing its end, the overall trend in the oil and gas sector is becoming clearer. Though the sector has not displayed notable growth, the actual earnings results are much better than expected.

The earnings estimates for the sector had fallen to real low levels ahead of this reporting cycle. This, however, turned out to be a blessing in disguise with more companies coming up with positive surprises for both earnings as well as revenues.

The oil and gas sector companies on the S&P 500 index that have reported Q1 results, account for 85.1% of the sector’s market capitalization in the index. They have seen total earnings plunge 99.6% year over year due to 29.2% lower revenues (data from the Zacks Earnings Trends report dated May 4, 2016). Among these, 59.3% beat earnings estimates, while 48.1% outpaced revenue expectations. Excluding the energy sector, total earnings for the remaining index members is down 1.6% due to 1.7% decline in revenues.

The weakness in the energy sector continues to hurt the overall growth picture. Several macro issues are responsible for the bleak pricing scenario. North America’s constant move toward energy independence has been creating ripples across world markets, OPEC is under pressure, forecasts for global energy trade are surfacing and the growth of mega projects is decelerating. These factors are expected to put further pressure on the already low commodity prices and we see no respite till the OPEC comes to terms with the major oil producers.

So far, 374 S&P 500 members, who account for nearly 75% of the index’s total market capitalization, reported Q1 earnings numbers. The earnings of these companies slipped 7.5% year over year on 1.9% lower revenues.

Let’s see where these two companies are headed ahead of their earnings release.

Independent exploration and production company focused on the acquisition and development of unconventional oil and natural gas resources, Oasis Petroleum Inc. OAS, is set release Q1 results on May 9, after the market closes. For the quarter, Oasis Petroleum has an Earnings ESP of 0.00%. The stock holds a Zacks Rank #3 (Hold) but a 0.00% ESP makes earnings prediction difficult. The company boasts an encouraging earnings the surprise history, wherein it beat estimates in three of the last four quarters with an average surprise of 11.11%.
 
Murphy USA Inc. MUSA, which sells gasoline products and convenience store merchandise primarily in the United States, will announce Q1 results on May 9, before the market opens. The company has an Earnings ESP of 0.00%. though Murphy USA carries a Zacks Rank #3, its 0.00% ESP complicates our surprise prediction. The company has a dismal earnings surprise history.  Murphy USA missed estimates in three of the last four quarters with an average negative surprise of 14.50%.

Don’t miss out on our full earnings release articles for these two oil refining stocks, as the actual results might hold some surprises!

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MURPHY USA INC (MUSA): Free Stock Analysis Report
 
OASIS PETROLEUM (OAS): Free Stock Analysis Report
 
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