5 Top-Ranked Oil Stocks That Consistently Beat Earnings

We are almost done with Q4 earnings season, with results on board from 484 S&P 500 members that combined account for 98.7% of the index’s total market capitalization.

According to our latest Earnings Trends report, overall earnings for the companies that have already reported are up 7.4% from the same period last year on 4.9% higher revenues, with 68.4% positive earnings surprises and 54.1% beating revenue estimates.

Energy Earnings Finally on the Up

Following 8 back-to-back quarters of earnings declines, analysts said that the sector was likely to get better in the fourth quarter and clock its first positive earnings growth after 2 years. With estimate revisions going up following OPEC’s Algeria grandstand, the Oil/Energy sector’s earnings were expected to improve 8.8% from the fourth quarter 2015 levels.

True to the predictions, the sector has come out swinging. For the 97.2% sector components on the S&P 500 index that have reported Q4 results, total earnings are up 19.0% on 2.5% higher revenues. While 65.7% of the companies have been successful in beating earnings estimates, 62.9% of them have come ahead of top-line expectations.

The Oil/Energy sector’s positive growth largely reflects better-than-expected quarterly profit from bellwether ExxonMobil Corp. (XOM - Free Report), which more than offset smaller rival Chevron Corp.’s (CVX - Free Report) disappointing Q4 numbers.

Earnings Beat: A Powerful Driver of Stock Movement

Investors always try to prepare themselves ahead of time and look for stocks that are likely to come up with a stellar performance. After much brainstorming, Wall Street analysts project earnings of companies. These estimates act as investment leads.

A positive earnings surprise or earnings beat is typically the case when actual or reported earnings come in above the consensus estimate. Historically, if a company’s earnings manage to beat market expectations, its stock surges post release.

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