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What's in Store for WPX Energy (WPX) in 3Q Earnings?

WPX Energy, Inc. WPX is scheduled to release third-quarter 2017 results on Nov 1, after the closing bell. Last quarter, this company delivered a positive surprise of 12.50%.

Factors to Consider

WPX Energy has raised 2017 oil production guidance and expects it to be in the range of 57,000-60,000 barrels per day from 52,000- 56,000 barrels per day. The company raised its 2017 oil volumes growth expectation to 40% from 30% in 2016. The Zacks Consensus Estimate for oil production is currently pegged at 63,000 barrels per day, reflecting a sequential increase of  6.8% and year over year growth of nearly 62%.

The company anticipates total production in 2017 to be 105-116 thousand barrels of oil equivalents per day (Mboe/d), up from 103-113 MBoe/d. The increasing focus on oil is quite evident with oil contributing more than 50% of the expected 2017 total production volumes.

The company is expected to gain from the increasing focus on oil, but the fluctuating commodity prices are a concern. Toward this,  WPX Energy has hedged a substantial volume of its oil and natural gas production to protect the same from fluctuating prices.

Toward this, the Zacks Consensus Estimate for total average daily production for oil is currently pegged at 63,000 barrels of oil equivalent per day, reflecting a 6.8% increase sequentially and approximately 62% year over year.

In this line, investors should note that the Zacks Consensus Estimate for total revenues of the company is currently pegged at $331 million, reflecting a sequential decline of 19.9%.

Earnings Whispers

Our proven model does not show that WPX Energy is going 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. But that is not the case here, as you will see below.

Zacks ESP: WPX Energy has an Earnings ESP of -2.61%. This is because the Most Accurate estimate is pegged at a loss of 14 cents, wider than the Zacks Consensus Estimate of a loss of 13 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few companies from the same industry that have the right combination of elements to post an earnings beat this quarter.

Northern Oil and Gas, Inc. NOG is expected to report third-quarter earnings 2017 on Nov 14. It has an Earnings ESP of +11.1% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bill Barrett Corp. BBG has an Earnings ESP of +6.7% and a Zacks Rank #2. It is slated to report third-quarter 2017 earnings on Oct 31.

Denbury Resources Inc. DNR has an Earnings ESP of +11.1% and a Zacks Rank #2. It is scheduled to report third-quarter 2017 earnings on Nov 7.

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Denbury Resources Inc. (DNR): Free Stock Analysis Report
 
Bill Barrett Corporation (BBG): Free Stock Analysis Report
 
WPX Energy, Inc. (WPX): Free Stock Analysis Report
 
Northern Oil and Gas, Inc. (NOG): Free Stock Analysis Report
 
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