Loews Corp (L) Q2 Earnings: Is Disappointment In Store?

Loews Corporation (NYSE:L) is slated to report second-quarter 2017 results on Jul 31, before the market opens. Last quarter, the company delivered a positive earnings surprise of 31.82%.

Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Loews Corp. is likely to report lower revenues at its Diamond Offshore (NYSE:DO) segment in the soon-to-be-reported quarter, due to ongoing challenging conditions in the offshore drilling market. Such a weak segmental performance might have impacted the company’s overall second-quarter results.

In addition, the Diamond Offshore unit has likely experienced a decline in net income, attributable to Loews Corp. in the second quarter due to a tough operating environment.

Further, the company is likely to display weak underwriting results in the second quarter due to challenging market conditions, thereby resulting in lower rates and a decreased insured exposure.

Also, the company has likely experienced a rise in total expenses this soon-to-be-reported quarter.

Nonetheless, Loews Corp. has likely witnessed a solid performance at Boardwalk Pipeline Partners (NYSE:BWP) and Loews Hotels units in the second quarter. Additionally, the company’s subsidiary, CNA Financial’s (NYSE:CNA) , improved results have in turn likely boosted its overall second-quarter performance.

With respect to the surprise trend, the company delivered positive surprises in all of the last four quarters with an average beat of 25.77%.

Earnings Whispers

Our proven model does not conclusively show that Loews Corp. is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Loews Corp. has an Earnings ESP of -5.26%. This is because the Most Accurate estimate is pegged at 72 cents, lower than the Zacks Consensus Estimate’s 76 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Loews Corp. carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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