Eversource Energy ES will release first-quarter 2015 earnings results before the market opens on Apr 30, 2015. This diversified utility reported a positive earnings surprise of 4.35% last quarter. We expect Eversource Energy to beat expectation this quarter too.
Why a Likely Positive Surprise?
Our proven model shows that Eversource Energy is likely to beat earnings because it has the right combination of two key ingredients. 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) for this to happen. This is the case here.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +5.00%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank: The combination of Eversource Energy’s Zacks Rank #3 and +5.00% ESP makes us confident of an earnings beat.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
What is Driving the Better-than-Expected Earnings?
Eversource Energy is one of the prominent utilities operating in the New England region. Over the last three years, the company has taken initiatives to integrate and strengthen its operations. From Feb 2015, Northeast Utilities along with its subsidiaries started to trade under the Eversource brand which further strengthened Eversource Energy’s operations.
These investments made by the company to strengthen its electric and natural gas infrastructure in New England are yielding positive results and are expected to boost first-quarter performance.
Cost reduction initiatives and natural gas customer additions will further drive the company’s results in terms of margin expansion and higher sales.
Other Stocks to Consider
Here are some companies tied to the utility industry 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.
Wisconsin Energy Corp. WEC has an earnings ESP of +2.44% and carries a Zacks Rank #2.
Dominion Resources, Inc. D has an earnings ESP of +1.04% and carries a Zacks Rank #3.
PG&E Corporation PCG has an earnings ESP of +11.77% and carries a Zacks Rank #3.
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