Integrys Energy Group, Inc. (TEG) will release its third-quarter 2014 financial results after the market closes on Nov 5, 2014. In the prior quarter, this electric utility reported a positive earnings surprise of 57.45%. Let’s see how things are shaping up at Integrys Energy prior to this announcement.
Factors to Consider This Quarter
A milder summer this year is expected to have a negative impact on power demand. In addition, higher operating expenses are expected to weigh on Integrys Energy’s earnings leading to a possible year-over-year shortfall.
The earlier-than-expected closing of its UPPCO sale is likely to lower earnings by 4 cents per share in the second half of 2014.
Earnings Whispers
Our proven model indicates that Integrys Energy Group does not have the right combination of elements to secure an earnings beat. 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 stand at 43 cents, resulting in 0.00% ESP.
Zacks Rank: Integrys Energy has a Zacks Rank #4 (Sell). The 0.00% ESP when combined with a Zacks #4 makes an earnings beat highly unlikely.
We particularly caution against stocks with Zacks Ranks #4 and 5 going into the earnings season particularly when they are seeing negative estimate revisions.
Stocks to Consider
Here are some utilities worth considering on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter.
Consolidated Edison, Inc. (ED) has an earnings ESP of +2.80% and carries a Zacks Rank #2 (Buy).
NRG Yield, Inc. (NYLD) has an earnings ESP of +75.44% and carries a Zacks Rank #1 (Strong Buy).
Dynegy Inc. (DYN) has an earnings ESP of +260.0% and carries a Zacks Rank #3 (Hold).
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