[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / September 22, 2016 / Active Wall St. announces its coverage of top earnings surprises within the Energy Sector. As per the data available through FactSet, the blended earnings for S&P 500 have declined 3.2% for Q2 2016. This second quarter marks the first time the benchmark index has recorded five consecutive quarters of y-o-y declines in earnings since Q3 2008 through Q3 2009. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
Today, AWS is promoting its earnings surprise review coverage on Cimarex Energy Co. (NYSE: XEC), Diamond Offshore Drilling Inc. (NYSE: DO), Mcdermott International Inc. (NYSE: MDR) and Concho Resources Inc. (NYSE: CXO). Get all of our free blog coverage and more by clicking on the link below:
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Energy Sector
Looking back at Q2 2016 earnings season, the Oil/Energy reports were again feeble, dragging down the aggregate growth picture for the S&P 500 index. Although crude prices recovered from the bottom of $30 per barrel, prices remained under $50, which is approximately half of the $100 mark it was trading at about 2 years ago and far below the breakeven price for many energy companies. The energy sector earnings plunged by 78.9% compared to Q2 2015, following a 108.6% tumble in Q1 FY16. The sector's revenue did not fare any better as it was down 24.4% in Q2 2016 after dropping 29.3% in Q1 2016.
What is in Store for Q3?
As per FactSet's data, the Energy sector has recorded the largest decline in earnings expectation on y-o-y basis. The sector is expected to report the largest y-o-y drop of 11.9% in sales for Q3 FY16. Five of the six sub-industries in this sector are predicted to report a y-o-y decline in revenues. Energy sector is forecasted to be the biggest drag on sales growth for the whole of S&P. Excluding the Energy sector, the blended revenue growth rate for the S&P 500 would improve to 4.0% from 2.5%.
Top Earnings Surprises
Although the picture painted for the Energy sector looks bleak, there were some companies that trumped the underlying challenges and stood out with great earnings surprises:
Cimarex Energy Co.
Earnings Surprise:
Independent oil and gas exploration and production firm Cimarex Energy Co. reported Q2 2016 earnings results on August 3, 2016. The company posted adjusted net income of $7 million in Q2 2016. Adjusted net income in the corresponding period in 2015 was $14.4 million. Cimarex Energy reported earnings of $0.7 per share, which handily beat analysts' expectations of $0.1 per share. In Q2 2016, the company's total revenue of $299 million topped analysts' forecast of $290 million. Cimarex Energy had cash and cash equivalents of $641.7 million as of June 30, 2016. Long-term debt was $1.5 billion as of Jun 30, 2016, representing a debt-to-capitalization ratio of 39.5%.
Stock Performance:
The stock closed the trading session at $128.68, jumping 2.05% from its previous closing price of $126.10, on Wednesday. A total volume of 797.56 thousand shares have exchanged hands. Cimarex Energy's stock price advanced 8.70% in the last three months, 36.40% in the past six months, and 27.73% in the previous twelve months. Moreover, on a year to date basis, the stock surged 44.44%. The company's shares have a dividend yield of 0.25%.
Diamond Offshore Drilling Inc.
Earnings Surprise:
On August 1, 2016, Diamond Offshore Drilling Inc. reported higher-than-expected earnings on cost cutting measures to counter lower demand for its rigs amid a slump in oil prices. The company reported that operating expenses declined by a third in Q2 2016, excluding a $612 million impairment charge related to the write-down of eight offshore rigs. For the quarter ended June 30, 2016, Diamond Offshore reported a net loss of $589.9 million, or $4.30 per share, compared to net income of $87.4 million, or $0.64 per share, in the year ago period. Excluding items, Diamond Offshore reported earnings of $0.16 per share, well above analyst estimate of $0.3 per share. The company's total revenue dropped 17.4% to $388.7 million.
Stock Performance:
At the close of trading session on September 21, 2016, Diamond Offshore Drilling's stock price rose 3.54% to end the day at $15.80. A total volume of 3.96 million shares were exchanged during the session, which was above the 3-month average volume of 2.77 million shares.
Mcdermott International Inc.
Earnings Surprise:
Mcdermott International Inc. on July 27, 2016, reported Q2 2016 net income of $20.7 million or $0.7 per share. Earnings, adjusted for restructuring costs, came in at $0.8 per share, topping Wall Street's expectations of $0.2 per share. The offshore drilling platforms constructor generated revenue of $706.6 million in Q2 2016, down from $1.04 billion in the prior-year's quarter and below analysts' estimates of $736 million. At the end of Q2 2016, McDermott had a backlog of $4.37 billion as against $3.13 billion in the year ago period.
Stock Performance:
Mcdermott International's stock is trading up 1.69%, closing Wednesday's session at $4.80 on volume of 2.52 million shares. The company's shares surged 43.28% since the beginning of the year. Additionally, the stock has advanced 26.32% in the last six months.
Concho Resources Inc.
Earnings Surprise:
Concho Resources Inc. on August 2, 2016, reported adjusted net income of $34 million for Q2 2016 compared to adjusted net income of $45.5 million in Q2 2015. The company reported adjusted earnings of $0.26 per share. Wall Street was projecting earnings of $0.05 per share. The company generated revenue of $565 million in Q2 2016 versus an estimate of $564 million. Revenue in Q2 2015 was $650 million.
Stock Performance:
At the close yesterday, Concho Resources' shares was climbed 4.51%, finishing the day at $128.31 with volume of 1.42 million shares exchanging hands by the close of the trading session. For the last six months, the stock has gained 26.36%. Furthermore, on a year to date basis, the stock gained 38.18%.
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