WEC Energy Group WEC will release third-quarter 2015 financial results before the market opens on Nov 4, 2015. In the prior quarter, this utility reported a positive earnings surprise of 7.27%. WEC Energy currently has a Zacks Rank #3 (Hold). Let’s see how things are shaping up at the company prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that WEC 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 of 61 cents and the Zacks Consensus Estimate of 59 cents, is at +3.39%. This is a meaningful indicator of a likely positive earnings surprise for the shares.
Zacks Rank: The combination of WEC Energy’s Zacks Rank # 3 and +3.39% ESP makes us confident of a likely earnings beat.
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
What is Driving the Better-than-Expected Earnings?
With the completion of the acquisition of Integrys Energy Group, WEC Energy Group has become one of the largest natural gas distribution companies in the U.S. The majority of its earnings will come from regulated operations, thereby providing earnings visibility.
The economic condition in WEC Energy’s service territories is improving steadily, which has resulted in higher demand from residential as well as industrial and commercial customers. Plus, warmer-than-normal temperatures in the third quarter are expected to boost demand for utility services.
Other Stocks to Consider
Here are some other companies tied to the electric 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.
Ameren Corporation AEE has an earnings ESP of +1.53% and carries a Zacks Rank #2.
Duke Energy Corporation DUK has an earnings ESP of +0.66% and carries a Zacks Rank #3.
Alliant Energy Corporation LNT has an earnings ESP of +3.17% and carries a Zacks Rank #3.
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