Electric utility provider, TECO Energy, Inc. TE is scheduled to report first-quarter 2015 results before the opening bell on Apr 28.
Last quarter, TECO Energy posted a negative earnings surprise of 9.52%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
Tampa, FL-based TECO Energy’s first-quarter earnings are expected to be driven by a number of factors including improving economic conditions in its service areas and the acquisition of New Mexico Gas Intermediate
In Sep 2014, TECO Energy completed the acquisition of New Mexico Gas Intermediate, the parent of New Mexico Gas Company. The transaction enabled the company to add over 513,000 gas customers to its portfolio and reinforce its footprint in New Mexico. This is certainly expected to step up its earnings in the to-be-reported quarter given the increasing demand for natural gas for heating purposes.
An improving economy in TECO Energy’s service areas – like waning unemployment rates and addition of new jobs and housing permits – is an added catalyst for its earnings.
TECO Energy’s sustained investments to improve reliability are expected to push up depreciation and interest costs. However, some relief on the cost front can be expected from lower operation and maintenance expenses on the heels of acquisition-related synergies.
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 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are at 28 cents per share.
Zacks Rank: TECO Energy has a Zacks Rank #2. However, its 0.00% ESP complicates the predictive power.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks in the utility industry you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:
NextEra Energy, Inc. NEE has an earnings ESP of +2.34% and a Zacks Rank #2.
Wisconsin Energy Corp. WEC has an earnings ESP of +2.44% and a Zacks Rank #2.
PG&E Corp. PCG has an earnings ESP of +17.39% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment