Duke Energy Corporation DUK is scheduled to report second-quarter 2015 results before the opening bell on Aug 6, 2015. Last quarter, the company posted a positive earnings surprise of 10.71%. Let’s see how things are shaping up for the second quarter.
Factors to Note
Duke Energy will have to deal with deteriorating demand for electricity in Brazil as well as unfavorable foreign currency exchange rates, which could lower international earnings.
However, economic recovery in its service territories in the U.S. will drive up electricity demand. The stronger U.S. dollar might nonetheless reduce domestic manufacturing activity, lowering demand from its industrial customers.
Earnings Whispers?
Our proven model does not conclusively show that Duke Energy will 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: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -1.96%. This is because the Most Accurate estimate is at $1.00 and the Zacks Consensus Estimate is pegged at $1.02.
Zacks Rank: Duke Energy’s Zacks Rank #2 increases the predictive power but when combined with -1.96% ESP makes an earnings beat unlikely.
We caution against stocks with a Zacks Rank #4 or 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 sector you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:
UIL Holdings Corporation UIL has an earnings ESP of +7.14% and carries a Zacks Rank #3.
Consolidated Edison, Inc. ED has an earnings ESP of +1.56% and carries a Zacks Rank #3.
Chesapeake Utilities Corporation CPK has an earnings ESP of +2.63% 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 >>
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