TECO Energy, Inc. (TE) will release its third-quarter 2014 financial results on Oct 31, 2014. In the prior quarter, the utility provider had reported a positive earnings surprise of 3.7%. Let’s see how things are shaping up for this announcement.
Factors to Consider this Quarter
Steady growth in customer count, primarily due to the gradual improvement in the economy of Florida, continues to boost TECO Energy’s results. A decrease in unemployment rates and growth in single-family building permits are expected to increase utility consumption in the future, thereby boosting cash inflow.
Tampa Electric Company, a subsidiary of TECO Energy, is expected to generate higher rate-base revenues in 2014, due to the rate case settlement agreement in Sep 2013. Subsequently, this may boost the company’s top line.
On the flip side, a mild summer in 2014 will likely have an adverse impact on power demand. This may consequently challenge TECO Energy’s financial performance. In addition, volatility in commodity prices is a primary cause of concern.
Earnings Whispers
Our proven model does not conclusively show that TECO Energy is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here.
Zacks ESP: This is because the Most Accurate Estimate and the Zacks Consensus Estimate both stand at 33 cents, resulting in an ESP of 0.00%.
Zacks Rank #2 (Buy): TECO Energy’s Zacks Rank #2 when combined with a 0.00% ESP makes a surprise prediction difficult. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated) going into the earnings release.
Stocks to Consider
Here are some utility companies worth considering as our model shows they have the right combination of elements to post an earnings beat this quarter.
Dynegy Inc. (DYN) has an earnings ESP of +260.00% and carries a Zacks Rank #2.
Consolidated Edison, Inc. (ED) has an earnings ESP of +2.80% and carries a Zacks Rank #2.
Duke Energy Corporation (DUK) has an earnings ESP of +0.66% and carries a Zacks Rank #3 (Hold).
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