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How EOG Resources’ Stock Prices Have Reacted after Past Earnings Beats

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Stock price action after 2Q16 earnings

EOG Resources (EOG) announced its 2Q16 earnings on August 4, 2016, after the market closed. After its 2Q16 earnings were announced, EOG Resources’ stock price increased by ~8% in the next two trading sessions.

We should note that in the past three months leading to this earnings release, EOG Resources’ stock price increased by ~6%, despite the ~5% fall in crude oil (USO) (UWTI) (DWTI) prices during the same period.

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EOG Resources’ stock price trend change

After losing ~51% of its market capitalization between July 2014 and January 2016, EOG Resources’ stock price is finally showing signs of a new uptrend. In April 2016, EOG Resources’ stock crossed the 200-day moving average and is currently trading ~18% above it. Since January 2016, EOG Resources’ stock price has risen by ~59%.

2016 relative performance

For 2016, EOG is outperforming bigger upstream companies from the S&P 500 (SPY). EOG is up by ~29%, whereas bigger oil and gas producers like Devon Energy (DVN), Occidental Petroleum (OXY), and Marathon Oil (MRO) are up by ~27%, ~12%, and ~14%, respectively.

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Stock price behavior after past earnings beats

In the past six quarters, EOG Resources has beaten its earnings expectations six times—every quarter. EOG Resources reported its 1Q16 earnings after the market closed on May 5, 2016. In 1Q16, excluding one-time items, EOG Resources reported a loss of $0.83 per share, or $0.01 better than the consensus of a loss of $0.84 per share. After the earnings release—in a contrarian reaction—better-than-expected earnings saw EOG Resources’ stock price fall by ~5% during the next two sessions.

EOG reported its 4Q15 earnings after the market closed on February 25, 2016, and excluding one-time items, EOG reported a loss of $0.27 per share—$0.05 better than the consensus for a loss of $0.32 per share. After the earnings release, despite its better-than-expected earnings, EOG Resources’ stock price fell again by ~5% during the next three sessions.

Other quarters

In its 3Q15 earnings, excluding one-time items, EOG reported a profit of $0.02 per share, which was $0.32 better than the consensus for a loss of $0.30 per share. After the earnings release, despite the huge earnings beat, EOG’s stock price fell by ~6% during the next five sessions.

A similar contrarian reaction was observed after EOG’s 2Q15 and 1Q15 earnings releases, when the stock fell by ~4% in one session and by ~11% in the next twelve sessions, respectively. In 2Q15 and 1Q15, EOG beat the consensus earnings estimates by $0.18 per share and $0.03 per share, respectively.

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