Dominion Resources, Inc. D is expected to beat expectations when it reports first-quarter 2015 earnings results before the opening bell on May 4, 2015.
Last quarter, Dominion had posted a 1.18% negative earnings surprise. Let’s see how things are shaping up for this announcement.
What’s Driving the Upbeat Results?
In the first quarter, Dominion Resources completed the acquisition of Carolina Gas Transmission (CGT), a 1,500-mile FERC-regulated interstate natural gas pipeline operator. The company had announced that the CGT acquisition will be immediately accretive to its operating earnings, which means that it should reflect in the first-quarter financial results.
The utility also completed a number of acquisitions last year that enhanced its renewable generation portfolio.
On the fourth quarter earnings call, Dominion issued first-quarter 2015 operating earnings guidance in the range of 85 cents to $1.00 per share. The driving factors for the quarter could be higher revenues from growth projects and improved margins from merchant generation.
However, there are chances of these positives being slightly offset by a return to normal weather and higher operating and depreciation expenses.
Why a Likely Positive Surprise?
Our proven model shows that Dominion Resources is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +1.04%. This is because the Most Accurate estimate of 97 cents per share is higher than the Zacks Consensus Estimate of 96 cents. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank: Dominion Resources currently carries a Zacks Rank #3 (Hold).The combination of Dominion’s Zacks Rank #3 and +1.04 % ESP makes us positive of a bottom-line beat this season.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Other Stocks to Consider
Dominion Resources is not the only stock looking up this earnings season. We also see likely earnings beat coming from these industry peers.
Wisconsin Energy Corp. WEC has an earnings ESP of +2.44% and a Zacks Rank #2.
Consolidated Edison, Inc. ED has an earnings ESP of +1.71% and a Zacks Rank #3.
Pepco Holdings, Inc. POM has an earnings ESP of +14.82% and a Zacks Rank #3.
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