Access Midstream Partners, L.P. (ACMP) is set to report its third-quarter 2014 earnings results on Oct 29, 2014. Last quarter, it had delivered a negative earnings surprise of 33.33%. Let us see how things are shaping up for this announcement.
Factors Affecting This Quarter
Access Midstream Partners holds a strong portfolio of natural gas pipelines and is gathering assets in the Marcellus, Barnett, Utica, Haynesville, Eagle Ford, Mid-continent and Niobrara Shale regions.
Access Midstream Partners plans to merge with energy infrastructure provider, Williams Partners L.P. (WPZ), a master limited partnership (MLP) of pipeline operator, Williams Companies Inc. (WMB). As compared to the previous proposal of June 2014, the terms of the deal have been amended to benefit both the companies. The value of the deal is estimated at $50 billion.
The merger is expected to close by 2015. Post merger, Williams Partners will become a wholly-owned subsidiary of Access Midstream Partners and the merged MLP will be named Williams Partners L.P. The merger will offer solid growth opportunities with the merged MLP focusing on components like natural gas pipelines, gathering and processing and natural gas liquids, and petrochemical services.
Earnings Whispers?
Our proven model does not conclusively show that Access Midstream Partners is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Access Midstream Partners has an ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 30 cents per share, making the difference 0.00%.
Zacks Rank: Access Midstream Partners’ Zacks Rank #2 increases the predictive power of ESP; but the company’s ESP of 0.00% makes a surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into an earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Other Stock to Consider
Here is a company you may want to consider as our model shows that this has the right combination of elements to post an earnings beat:
Delek Logistics Partners, LP (DKL) has an Earnings ESP of +5.56% and a Zacks Rank #1.
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