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EOG Resources (EOG) Q3 Earnings: What's in the Cards?

Upstream energy player EOG Resources Inc. EOG is expected to release third-quarter 2017 results on Nov 2, after the closing bell.

Last quarter, the company delivered a negative earnings surprise of 20%. In the last four quarters, the company’s average earnings surprise was a positive 11.2%. Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that EOG Resources is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +12.18%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: EOG Resources carries a Zacks Rank #3 (Hold), which, when combined with +12.18% ESP, makes us confident about a positive earnings surprise.

Note that stocks with Zacks Ranks #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement. 

What Is Driving the Better-Than-Expected Earnings?

The Zacks Consensus Estimate for total Crude Oil and Condensate Volumes is 342 thousand barrels per day (MBbl/d), higher than last quarter’s actual figure of 335 MBbl/d and year-ago quarter’s 282.6 MBbl/d. The Zacks Consensus Estimate for Average Crude Oil and Condensate Prices (Composite) is $48.57 per barrel, higher than last quarter’s $47.46 per barrel and the year-ago quarter’s $43.63 per barrel.

The Zacks Consensus Estimate for total Natural Gas Liquids Volumes is 82 MBbl/d, marginally higher than the year-ago actuals. The Zacks Consensus Estimate for Average Natural Gas Liquids Prices (Composite) is $18.92 per barrel, higher than the year-ago quarter’s $14.92 per barrel.

The Zacks Consensus Estimate for Average Natural Gas Prices (Composite) is $2.20 per thousand cubic feet (Mcf), higher than year-ago quarter’s $1.95 per Mcf.

Moreover, the Zacks Consensus Estimate for total production is 56 million barrels of oil equivalent (MMBoe), higher than last quarter’s 55 MMBoe and year-ago quarter’s 51.1 MMBoe.

Hence, we expect the company to report healthy Q3 numbers on the back of higher realized commodity prices and production.

Q3 Price Performance

During the quarter, EOG Resources gained 6.8% compared with 5% growth of the industry.

Other Stocks to Consider

Here are some companies that you may also consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

Canadian Natural Resources Ltd. CNQ is an exploration and production company. It has an Earnings ESP of +1.08% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Denbury Resources Inc. DNR is an exploration and production company based in Plano, TX. It has an Earnings ESP of +11.11% and a Zacks Rank #2.

Cenovus Energy Inc. CVE is an integrated oil major from Canada. The company has an Earnings ESP of +40.00% and a Zacks Rank #2.

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Canadian Natural Resources Limited (CNQ): Free Stock Analysis Report
 
Cenovus Energy Inc (CVE): Free Stock Analysis Report
 
Denbury Resources Inc. (DNR): Free Stock Analysis Report
 
EOG Resources, Inc. (EOG): Free Stock Analysis Report
 
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