Wisconsin Energy Corp. (WEC) will release its third-quarter 2014 financial results before the market open on Oct 29, 2014. In the prior quarter, this electric utility reported a positive earnings surprise of 11.54%. Let’s see how things are shaping up at Wisconsin 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. Wisconsin Energy’s third-quarter earnings are thus expected to decline year over year.
Meanwhile, environmental regulations are expected to get more stringent going forward. Wisconsin Energy’s electricity generation mainly relies on coal as a result of which it has to step up its environmental spending.
The gradual improvement in the Wisconsin economy has however helped the company to boost its customer base and this trend is expected to continue in the third quarter as well.
Earnings Whispers
Our proven model indicates that Wisconsin Energy 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.
Positive Zacks ESP: This is because the Most Accurate estimate stands at 51 cents while the Zacks Consensus Estimate is 50 cents, resulting in +2.00% ESP
Zacks Rank: Wisconsin Energy has a Zacks Rank #4 (Sell).
Although the positive ESP increases the predictive power, we particularly caution against stocks with Zacks Ranks #4 and 5 going into the earnings season.
Other 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).
Southern Company (SO) has an earnings ESP of +1.87% and carries a Zacks Rank #2 (Buy).
ALLETE, Inc. (ALE) has an earnings ESP of +2.78% and carries a Zacks Rank #3 (Hold).
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
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment