Is Wisconsin Energy Poised to Beat Earnings Again? - Analyst Blog
April 28 2014 - 7:00PM
Zacks
We expect utility service provider Wisconsin Energy
Corp. (WEC) to beat expectations when it reports
first-quarter 2014 results on Apr 30, 2014.
Why a Likely Positive Surprise?
Our proven model shows that Wisconsin Energy is likely to beat
earnings because it has the right combination of two key
factors.
Positive Zacks ESP: The Earnings ESP (Expected
Surprise Prediction), which represents the difference between the
Most Accurate estimate and the Zacks Consensus Estimate, is +2.41%.
This is a meaningful and leading indicator of a likely positive
earnings surprise for this company.
Zacks #2 Rank (Buy): The stocks with Zacks Ranks
of #1, 2 and 3 have a significantly higher chance of beating
earnings. The Sell rated stocks (#4 and 5) should never be
considered going into an earnings announcement.
The combination of Wisconsin Energy’s Zacks Rank #2 (Buy) and
+2.41% ESP make us confident of a positive earnings beat on Apr
30.
What is Driving Better-than-Expected Earnings?
Wisconsin Energy could be up for another bottom-line outperformance
in first quarter 2014 following its positive earnings streak in the
last four quarters. A key factor that could act as a growth driver
includes the steady economic improvement in the state of
Wisconsin.
Continued customer additions signal better earnings prospects for
the company in the first quarter. Wisconsin Energy witnessed a 6.4%
and a more than 15% increase in electric service connections as
well as natural gas installations, respectively in 2013 from
2012.
In addition, Wisconsin Energy’s ambitious biomass-plant attained
full commercial operability in Nov 2013. This will allow the
company to meet rising industrial demand for electricity and in
turn will lend additional upside to its sales stream.
Moreover, Wisconsin Energy’s cost-abatement efforts via gradual
conversion of its coal-fired units to natural gas-fired plants will
help minimize operating costs. This could certainly enhance the
company’s profitability.
Other Stocks to Consider
Wisconsin Energy is not the only company looking up this earnings
season. We also see likely earnings beat coming from other utility
providers.
NRG Yield, Inc. (NYLD), Earnings ESP of +23.53%
and Zacks Rank #1 (Strong Buy).
Exelon Energy Corp. (EXC), Earnings ESP of +6.94%
and Zacks Rank #2 (Buy).
Ameren Corp. (AEE), Earnings ESP of +6.25% and
Zacks Rank #2 (Buy).
AMEREN CORP (AEE): Free Stock Analysis Report
EXELON CORP (EXC): Free Stock Analysis Report
NRG YIELD INC-A (NYLD): Free Stock Analysis Report
WISC ENERGY CP (WEC): Free Stock Analysis Report
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