CenterPoint Energy, Inc. (CNP) is set to report its third-quarter 2014 earnings results before the market opens on Nov 5, 2014. Last quarter, it had delivered a positive earnings surprise of 4.17%. Let us see how things are shaping up for this announcement.
Factors Affecting this Quarter
Houston, TX-based CenterPoint Energy continues to witness a rise in its customer count. With the city’s economy booming on account of economic expansion and development, CenterPoint Energy will likely witness more customer additions, thereby resulting in higher revenues for the company. The company is equally focused on infrastructure development and expansion of its operations to meet the increasing demand in the economy.
However, the company’s location in the hurricane-prone area acts as a strong growth deterrent that impacts its revenues negatively. The hurricane season begins in June and is at its peak in September. With the third quarter primarily being a hurricane season for the company, it will likely have mounting expenditures which may not be fully recovered through rate revisions. Moreover, exposure to volatile commodity prices also puts the company’s revenues at risk.
Earnings Whispers?
Our proven model does not conclusively show that CenterPoint Energy is likely to beat on 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) for this to happen. That is not the case here as you will see below.
Zacks ESP: CenterPoint Energy 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: CenterPoint Energy carries Zacks Rank #4 (Sell).
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Consolidated Edison, Inc. (ED) has an Earnings ESP of +2.80% and a Zacks Rank #2.
Duke Energy Corporation (DUK) has an Earnings ESP of +0.66% and a Zacks Rank #3.
Dynegy Inc. (DYN) has an Earnings ESP of +260.00% 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
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