According to a February 6th report from FactSet Insight, the energy sector is to date reporting the greatest year-over-year decrease in EPS among all ten sectors in the S&P 500, with firms in the sector showing an average decline of -21.5%.
That said, John Butters, Senior Earnings Analyst at FactSet Insight, notes that not all is gloom and doom in the energy sector. He points to the oil & gas equipment & services and oil & gas refining & marketing sectors, noting they are both reporting strong double-digit gains in EPS in the fourth quarter.
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More on the strong areas of the energy sector
Butters highlights that the oil & gas equipment & services industry is currently reflecting the highest earnings growth among the seven industries in the energy sector at 22.9%. Of note, all six companies in this energy industry will report or have already reported EPS growth for the quarter (led by Baker Hughes with an EPS of $1.44 vs. $0.62 y-o-y). It is interesting to note that these six companies have seen an average price decline of 3.5% since the end of the year, relative to an average price increase of 1.7% for all the companies in the energy sector.
The oil & gas refining & marketing industry is currently sporting the second highest earning growth among the seven industries in the energy sector at a solid 18.5%. The four companies in this sub-industry have a ll reported some EPS growth for the quarter (led by Tesoro with an $1.44 vs. $0.04 y-o-y). The four firms have seen an average price increase of 10.6% since the first of the year, while the average price increase for all the firms in the energy sector during this time has been 1.7%.
Oil & gas transportation & storage industry
However, the oil & gas equipment & services industry and oil & gas refining & marketing industry are projected to slow down in 2015. The oil & gas equipment & services sub-industry is expected to report a year-over-year decline in earnings of 33.7% in 2015, while the oil & Gas refining & marketing industry is looking at at a year-over-year decrease of around 11.6%.
Butters also highlights that the only industry in the energy sector projected to report EPS growth in 2015 is the oil & gas transportation & storage sub-industry (consensus for 13.8% EPS growth).