When two of the U.S.' so-called Big Three oilfield service and equipment providers-- Halliburton (HAL) - Get Report and Schlumberger (SLB) - Get Report-- report third quarter earnings this week, they're likely to focus on the positive sentiment they're hearing from their customers (producers such as ExxonMobil (XOM) - Get Report, Chevron (CVX) - Get Report and Occidental Petroleum (OXY) - Get Report), how well they are positioned for an eventual industry upturn, and what they are doing to further position themselves for the rebound. 

Public company executives of the oil and natural gas industry are more often than not perpetual bulls, because let's face it, they're not going to supply the reasons why you shouldn't invest in their company.

But investors would do well to take this optimistic sentiment with a grain of salt this earnings season and instead pay careful attention to two factors in the coming months: Are oilfield services companies kicking off hiring programs and are they bulking capital budgets for equipment repairs and new equipment purchases?

Many investors will eat up management team's rhetoric and few analysts will hold their feet to the fire, because as Katherine Richard, CEO of Oklahoma City-based Warwick Energy Group, says, the oil and natural gas market is a market that trades on sentiment rather than fundamental supply and demand.

Witness the 60% to 70% price correction in commodities that occurred following OPEC's November 2014 decision to continue producing oil at record numbers. Refusing to cut production effectively resulted in a 2% market oversupply, and subsequently an extremely rare and drastic price reduction for the commodity, Richard explained in a recent interview with The Street. 

Now that OPEC has effectively motioned to the market that some are willing to come to the table over a production freeze, positive sentiment has driven oil back up to around $50 per barrel, spurring deal and drilling activity. 

While it's not necessarily a bad thing for investors to hear more positive thinking amidst one of the worst commodity downturns in the history of the oil and gas industry, it also can be dangerous for the future of the industry if those participating in the capital markets are not also looking at the fundamentals, according to Stephens Inc. analyst Matthew Marietta. 

A market propelled on sentiment alone could be caught on less than solid footing. 

But when we see that these companies are initiating hiring programs and beginning to spend more money on repairing idled or old equipment and even buying brand new equipment, we'll know management teams are actually starting to believe their own talk. 

And when these fundamentals start showing up on the balance sheets of the Big Three oilfield services providers, industry followers will know a recovery is actually materializing, because until the industry leaders start eating, smaller players like Superior Energy Services (SPN)  can't start picking up the crumbs. 

Oilfield services industry leaders Schlumberger, Halliburton and Baker Hughes (BHI) , along with the dozens of lower-tier providers in the space, have gone through massive layoffs in the past two years in order to cut costs and rightsize their balance sheets for a $40 to $45 per-barrel-oil-world. 

After nearly two years of lower oil prices, companies also have ceased funneling cash into rebuilding old equipment and purchasing new equipment.

It's hard to imagine, however, that we'll see any evidence of either of these taking place in the days to come.

In fact, General Electric (GE) - Get Report reported Monday that it would cut 255 Houston-area jobs from it's turbine repair facility due to a lack of commitments and orders this year from oil and gas customers who continue to delay projects and decisions.

Moreover, Halliburton may be among the least likely to kick off these initiatives. Put aside the day-to-day impacts of a prolonged industry downturn, and Halliburton still faces the daunting task of clawing back from a $3.5 billion merger breakup fee that helped the company realize a second quarter operating loss of $3.73 per share, or $3.9 billion. 

A consensus of more than 30 analysts expects HAL to report an earnings loss of 7 cents per share on $3.9 billlion in revenue for the third quarter.

In it's Wednesday release and conference call, Halliburton will likely focus on how U.S. land will be a first mover for the industry upturn, and while many analysts, including RBC Capital Markets' Kurt Hallead, like the company for its North American market presence, others, including Stephens' Marietta warn that North American competition continues to be highly competitive in terms of market share and services pricing. 

Baker Hughes and Schlumberger, which are both more diversified in geographies and products, will likely have a less optimistic view on U.S. land than their North American-focused peer Halliburton. On the other hand, investors will likely hear a cautiously optimistic stance on the international market from these players, as many analysts have called for an international activity bottom in the first quarter of 2017.

Schlumberger, often lauded for being the first to see an industry downturn approaching, is expected to be in the green, with analysts calling for third quarter earnings of 22 cents per share on revenues of $7.1 billion on Thursday. Still, that's a long fall from the 78 cents per share profit on $8.5 billion in sales the company recorded this time last year. 

Baker Hughes, the smallest of the Big Three in terms of market capitalization and sales, is set to report the largest loss at 45 cents per share on $2.4 billion in revenues. Baker Hughes, which reports Oct. 25 before the market opens, continues to undergo a rebuilding phase in order to regain the market share it is said to have lost when it attempting to consummate a merger with Halliburton.

Halliburton, Schlumberger and Baker Hughes all were trading up slightly Tuesday afternoon ahead of earnings. Halliburton will kick off oilfield services third quarter reporting prior to the market opening Wednesday, with a conference call to follow at 9 a.m. eastern. 

Jim Cramer's.Action Alerts PLUS Charitable Trust Portfolio owns oil services company Schlumberger and driller Occidental Petroleum. Want to be alerted before Cramer buys or sells SLB or OXY? Learn more now.