uploads///COP Q Pre Net Income

Can ConocoPhillips Report Its First Profit in 2 Years in 2Q17?

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Net income estimates

ConocoPhillips (COP) is set to report its 2Q17 earnings on July 27, 2017, before the market opens. For 2Q17, excluding any one-time items, the current consensus net income estimate for ConocoPhillips is ~$39 million.

On a year-over-year basis, ConocoPhillips is expected to turn its 2Q16 loss into a profit. In 2Q16, COP reported adjusted net income of about -$985 million. On a sequential basis and excluding any one-time items, COP’s 2Q17 consensus net income estimate is higher than its loss of ~$177 million in 1Q17.

Based on the current consensus net income estimate, ConocoPhillips (COP) is expected to report a profit for the first time in two years. However, the analysts’ 2Q17 EPS (earnings per share) estimates are still negative for COP.

We’ll look at ConocoPhillips’s 2Q17 EPS estimates in this article. COP’s peer Encana (ECA) is expecting a lower profit of ~$36 million in 2Q17 than its profit of ~$89 million in 2Q16.

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EPS estimates

For 2Q17, excluding any one-time items, Wall Street analysts’ current consensus EPS estimate for ConocoPhillips is -$0.02. On a year-over-year basis, its 2Q17 current consensus EPS estimate is $0.77 higher than its 2Q16 adjusted EPS of -$0.79.

Sequentially, COP’s 2Q17 current consensus EPS estimate is higher than its adjusted EPS of -$0.14 in 1Q17.

ConocoPhillips’s 1Q17 earnings performance

In its most recent earnings release in May 2017, ConocoPhillips (COP) reported a worse-than-expected loss of ~$177 million in 1Q17. Wall Street analysts had expected a profit of ~$16 million.

On a year-over-year basis, COP cut its losses more than 84.0%. In 1Q16, COP reported a loss of ~$1.2 billion. On a sequential basis and excluding any one-time items, COP cut its losses by ~44.0% in 1Q17 from a loss of ~$318.0 million in 4Q16.

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ConocoPhillips’s peers Southwestern Energy (SWN), Marathon Oil (MRO), and Encana (ECA) reported adjusted net incomes of about $87 million, -$57 million, and $104 million, respectively, in 1Q17. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies.

In this series…

Having analyzed ConocoPhillips’s 2Q17 earnings expectations, we’ll also look at its revenue expectations, production guidance, and cash flow estimates. We’ll also estimate the odds of ConocoPhillips beating its EPS expectations, and we’ll see what Wall Street analysts are saying about ConocoPhillips ahead of its earnings.

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