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Whiting Petroleum (WLL) Q1 Earnings: What's in the Offing?

Nilanjan Choudhury
Updated

Domestic oil and gas explorer Whiting Petroleum Corporation WLL is scheduled to report its first-quarter earnings on Monday, Apr 30, after market close. The current Zacks Consensus Estimate for the quarter under review is a profit of 22 cents on revenues of $473.2 million.

In the preceding three-month period, the company beat the consensus mark by 46.9% on robust output and prices.

As far as earnings surprises are concerned, the Denver, CO-based upstream operator is on a firm footing, having gone past the Zacks Consensus Estimate in each of the last four reports. This is depicted in the graph below:

Whiting Petroleum Corporation Price and EPS Surprise

 

Whiting Petroleum Corporation Price and EPS Surprise | Whiting Petroleum Corporation Quote

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Investors are keeping their fingers crossed and hoping that Whiting Petroleum surpasses earnings estimate this time too. Let’s delve deeper and find out the factors impacting the results.

Factors to Consider This Quarter

We believe that the improving oil price environment and strong production bode well for the company’s upcoming report.

Management had earlier guided first-quarter total production in the band of 11.1-11.6 million barrels of oil equivalent (MMBOE) – primarily from the Williston Basin. We note that the current Zacks Consensus Estimate for the quarterly output is 11.40 MMBOE, at the midpoint of the company’s forecast range and above the 10.56 MMBOE reported in the year-ago quarter.

Meanwhile, analysts polled by Zacks expect average realized oil price to rise 25.2% from the year-ago quarter to $55 per barrel.

However, Whiting Petroleum’s per unit depreciation, depletion, and amortization costs remain on the higher side and could push up the company’s breakeven point. This might affect the Whiting Petroleum’s bottom line in the first quarter of 2018.

Earnings Whispers

Our proven model does not conclusively show that Whiting Petroleum will 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) to be able to beat consensus estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

That is not the case here as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -12.95%.

Zacks Rank: Whiting Petroleum is #3 Ranked. Though a Zacks Rank of 3 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.

We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

While earnings beat looks uncertain for Whiting Petroleum, here are some energy companies you may want to consider on the basis of our model, which shows that they have the right combination of elements to post earnings beat this quarter:

EOG Resources, Inc. EOG has an Earnings ESP of +12.50% and a Zacks Rank #1. The firm is expected to release earnings on May 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Helmerich & Payne, Inc. HP has an Earnings ESP of +16.93% and a Zacks Rank #3. The company is anticipated to release earnings on Apr 26.

ConocoPhillips COP has an Earnings ESP of +0.62% and a Zacks Rank #3. The company is anticipated to release earnings on Apr 26.

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Helmerich & Payne, Inc. (HP) : Free Stock Analysis Report
 
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
 
Whiting Petroleum Corporation (WLL) : Free Stock Analysis Report
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
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