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Occidental (OXY) Q4 Earnings: Will it Beat Estimates Again?


We expect Occidental Petroleum Corporation OXY to beat earnings estimates when it releases fourth-quarter 2017 financial results after the market closes on Feb 13. In the third quarter, the oil and gas company delivered a positive earnings surprise of 63.64%.

Why a Likely Surprise?

Our proven model shows that Occidental Petroleum is likely to beat estimates this quarter. This 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 the case here, as you will see below.

Zacks ESP: Occidental Petroleum has an Earnings ESP of +1.63%.

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

Zacks Rank: Occidental Petroleum’s Zacks Rank #1 when combined with the positive ESP, increases the possibility of earnings surprise.

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.

Factors to Consider

Occidental Petroleum expects Permian Resources volumes to be 30% higher than the fourth-quarter 2016 levels, primarily due to the four rigs added in the region during mid-2017.

The Zacks Consensus Estimate for average daily production is 635,000 barrels of oil equivalent per day (boe/d), reflecting year-over-year and sequential growth of 4.6% and 5.8%, respectively. This is within Occidental Petroleum’s expectation of 633,000 to 641,000 boe/d. The company will also benefit from the improving oil prices.

Contribution from its Chemical segment is expected to be $190 million in the fourth quarter, down sequentially due to seasonality in the business.

The Zacks Consensus Estimate for total revenues and earnings for the quarter stand at $3,504 million and 39 cents, respectively, reflecting sequential growth of 12.8% and 116.7%.

Other Stocks to Consider

Occidental Petroleum is not the only company with the right parameters to come out with earning surprise this season. 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.

EOG Resources Inc. EOG has an Earnings ESP of +4.06% and Zacks Rank 1. It is expected to report fourth-quarter 2017 earnings on Feb 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ecana Corporation ECA has an Earnings ESP of +2.04% and Zacks Rank 3. It is expected to report fourth-quarter 2017 earnings on Feb 15.

Apache Corporation APA has an Earnings ESP of +0.22% and Zacks Rank 3. It is expected to report fourth-quarter 2017 earnings on Feb 22.

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