TECO Energy Inc. TE will release third-quarter 2015 financial results before the market bell on Nov 5, 2015. The company reported earnings in line with estimates in the previous quarter. Let’s see how things are shaping up at TECO Energy prior to this announcement.
Factors to Consider
During the quarter, TECO Energy entered into talks with Canada-based Emera Incorporated. Emera is looking to acquire TECO Energy for a deal valued at about $6.48 billion in cash.
Earnings of TECO Energy’s unit New Mexico Gas Company tend to fluctuate with weather patterns in its service territories. The warmer-than-expected temperature in the third quarter will lower demand for natural gas needed for residential heating purposes.
Earnings Whispers?
Our proven model does not conclusively show that TECO Energy is likely to beat earnings this quarter. This 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.
Zacks ESP: TECO Energy has an Earnings ESP of -6.06%. This is because the Most Accurate estimate stands at 31 cents while the Zacks Consensus Estimate is pegged at 33 cents.
Zacks Rank: TECO Energy‘s Zacks Rank #4 and -6.06% ESP make an earnings surprise call unlikely this season.
As it is, 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.
Stocks to Consider
Here are a few operators in the electric utility space 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 Corp. AEE has an Earnings ESP of +1.53% and carries a Zacks Rank #2.
Duke Energy Corp. DUK has an Earnings ESP of +0.66% and carries a Zacks Rank #2.
WEC Energy Group, Inc. WEC has an Earnings ESP of +3.39% and carries a Zacks Rank #3.
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