AEE Ameren Corp

NextEra Energy Inc. (NEE) will release its first quarter 2014 financial results before the market bell on Apr 30, 2014. In the prior quarter, this utility reported a negative earnings surprise of 1.04%. NextEra Energy currently has a Zacks Rank #3 (Hold). Let’s see how things are shaping up at NextEra prior to this announcement.

Factors to Consider this Quarter

The ongoing improvement in the Florida economy resulting in a declining unemployment rate and an increase in housing permits has created fresh demand for utility services. This is likely to boost the prospects of utility operators like NextEra.

Higher revenues notwithstanding, spiraling costs have impacted NextEra’s margins. The company will be required to lower its total costs during the upcoming quarters to register improved performances.

NextEra Energy produces more than 20% of its electricity from nuclear units. Energy production from nuclear facilities runs the risk of accidents and these facilities need to go for scheduled downtimes for routine maintenance and repairs. Incidentally, three nuclear units went for planned downtime in the first quarter. Sometimes the downtimes last longer than planned, thereby impacting electricity production.

Earnings Whispers

Accordingly, our proven model does not conclusively show that NextEra Energy is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here.

Negative Zacks ESP:  This is because the Most Accurate estimate stands at $1.08 per share while the Zacks Consensus Estimate is $1.09, resulting in a -0.92% ESP.

Zacks Rank #3 (Hold): NextEra Energy’s Zacks Rank #3 combined with a -0.92% ESP makes surprise prediction difficult.  We caution against stocks with Zacks #4 and #5 Ranks (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some companies tied to the Electric utility industry 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 Corporation (AEE) has an earnings ESP of +6.25% and carries a Zacks Rank #2 (Buy).

Calpine Corp.(CPN) has an earnings ESP of +28.57% and carries a Zacks Rank #2 (Buy).

Public Service Enterprise Group Inc. (PEG) has an earnings ESP of +7.61% and carries a Zacks Rank #2 (Buy).
 

 
AMEREN CORP (AEE): Free Stock Analysis Report
 
CALPINE CORP (CPN): Free Stock Analysis Report
 
NEXTERA ENERGY (NEE): Free Stock Analysis Report
 
PUBLIC SV ENTRP (PEG): Free Stock Analysis Report
 
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