Energy Companies EOG Resources and HollyFrontier Report Earnings Friday

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 |  Includes: EOG, HFC
by: Robert Weinstein

We expect to see earnings on just a few energy stocks; the following two I believe are worth taking a look at. These are the biggest ones offering the most liquid markets to profit from. If you own these names or looking to buy before the release you may want to think about protecting from the downside through options in case of a miss. Just as important, if you are considering writing options due to the "unusual" premium, know that the price may have a very fast and far move after each company reports. I am including some of the key numbers that I believe should be looked at before investing into earnings.

EOG Resources, Inc. (EOG) is a $26.63 billion market cap company that trades an average of 2.31 million shares per day. Analysts are expecting an improvement of $0.11 in earnings per share compared with last quarter's results of $0.68. The company was founded in 1985 and is based in Houston, Texas.

Time Released:After Close
Industry: Oil & Gas Operations
Recent Price: $97.11
52 Week High: $121.44
52 Week Low: $85.42
Book Value: $43.92

Next quarter estimated mean earnings are shaping up to be $0.79 per share. Analyst estimates range from $0.64 to $1 per share.

The P/E ratio has dropped, as the current trailing twelve months (ttm) P/E ratio is 143.78, while the forward P/E ratio is now 16.29. It appears based on the lower PE that investors are pricing in less growth.

The company has rising revenue year-over-year of $6.10 billion for 2010 vs. $4.79 billion for 2009. The bottom line has falling earnings year-over-year of $160.65 million for 2010 vs. $546.63 million for 2009. The company's earnings before income and taxes are falling with an EBIT year-over-year of $523.32 million for 2010 vs. $970.84 million for 2009.

Gross revenue is growing at an annual rate of 27.43%.


Gross reported revenue compared with the mean estimate (rounded).

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Mar-11 $ 1.62 b $ 1.90B $ 280.44M 17.35%
Dec-10 $ 1.52 b $ 1.79B $ 264.99M 17.39%
Sep-10 $ 1.39 b $ 1.58B $ 191.98M 13.81%
Jun-10 $ 1.24 b $ 1.36B $ 122.84M 9.95%
Mar-10 $ 1.22 b $ 1.37B $ 150.41M 12.33%
Click to enlarge

M = millions, B = billions

Reported earnings per share compared with the mean estimate. Differences are rounded.

Fiscal Quarter Ending Month-Year Estimate Actual Difference Difference %
Mar-11 0.54 0.68 0.14 25.93%
Dec-10 0.26 0.36 0.1 38.46%
Sep-10 0.18 0.18 0 0.00%
Jun-10 0.24 0.18 -0.06 -25%
Mar-10 0.51 0.46 -0.05 -9.8%
Click to enlarge

(Some onetime items are often excluded in reported EPS)

HollyFrontier Corp (HFC) is a $26.63 billion market cap company that trades an average of 1.74 million shares per day. Analysts are expecting an improvement of $1.70 in earnings per share compared with last quarter's results of $1.58. The company was founded in 1947 and is headquartered in Dallas, Texas.

Time Released: Before Open
Industry: Oil & Gas Operations
Recent Price: $71.21
52 Week High: $77.80
52 Week Low: $25.74
Book Value: $14.51

A beat of $2.52 per share, will top the estimated mean earnings, and very impressive.The P/E ratio has been discounted, as the current trailing twelve months (ttm) P/E ratio is 18.12, while the forward P/E ratio is now 8.72. It will be interesting to watch if pricing is currently at a discount, or if the market has been correct to price in lower growth expectations. With the very nice run the stock has had in the last year it is not a surprise that some PE retraction took place.

The company has rising revenue year-over-year of $8.32 billion for 2010 vs. $4.83 billion for 2009. The bottom line has rising earnings year-over-year of $103.96 million for 2010 vs. $19.53 million for 2009. The company's earnings before income and taxes are falling with an EBIT year-over-year of $263.00 million for 2010 vs. $80.31 million for 2009.

Annually, revenue is growing at a rate of 72.17%.


Gross reported revenue compared with the mean estimate (rounded).

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Mar-11 $ 2.11 b $ 2.33B $ 214.95M 10.18%
Dec-10 $ 2.13 b $ 2.21B $ 85.10M 4%
Sep-10 $ 2.32 b $ 2.09B $ -225.01M -9.72%
Jun-10 $ 2.07 b $ 2.15B $ 75.20M 3.63%
Mar-10 $ 1.75 b $ 1.87B $ 123.74M 7.07%
Click to enlarge

M = millions, B = billions

Reported earnings per share compared with the mean estimate. Differences are rounded.

Fiscal Quarter Ending Month-Year Estimate Actual Difference Difference %
Mar-11 1.43 1.58 0.15 10.49%
Dec-10 0.39 0.27 -0.12 -30.77%
Sep-10 0.95 0.96 0.01 1.05%
Jun-10 0.96 1.24 0.28 29.17%
Mar-10 -0.48 -0.53 -0.05 NA%
Click to enlarge

(Some onetime items are often excluded in reported EPS)

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, Google Finance, MSN Money, CNBC, Zacks and Yahoo Finance for most of my data. I use the "confirmed" symbols from earnings.com that I believe to be of the most interest. I also often include some that are not "confirmed" but are "Proposed" for the same day. The numbers are only as good as the sources. Many of the ADRs that are relatively new provide a special challenge that can be very time consuming to figure out the "best" number. Chinese ADRs that are new seem to be especially prone to conflicts with Reuters, EDGAR Online, and other sources. Not everyone puts companies into the same sector. I use Reuters as my primary guide to keep it consistent.