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NiSource Inc. (NI - Analyst Report) is slated to release its second quarter 2013 earnings results before the market bell on Jul 31. Last quarter, the company reported a negative earnings surprise of 1.43%. Let’s see how things are shaping up for the utility operator for this announcement.

Factors to Consider This Quarter

NiSource’s pipeline operations are expected to benefit from the current shale boom in the U.S. Moreover, the Minisink Compressor project, part of its Millennium Pipeline program, has already come into service during the second quarter which will spur the company’s profitability.

Furthermore, an initial commencement of services at the West Side Expansion venture will act as a tailwind for NiSource. However, tepid macroeconomic conditions in the U.S. are still affecting electricity prices which might offset the company’s returns.

Earnings Whispers?

Our proven model does not conclusively show that NiSource is likely to beat earnings this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP:  The Most Accurate estimate stands at 23 cents while the Zacks Consensus Estimate is higher at 24 cents. This comes to a difference of -4.17%.

Zacks Rank #2 (Buy): NiSource has a Zacks Rank #2 (Buy). This combined with an ESP of -4.17% makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

IdaCorp Inc. (IDA - Snapshot Report), Earnings ESP of +17.65% and a Zacks Rank #2 (Buy).

Pinnacle West Capital Corp. (PNW - Analyst Report), Earnings ESP of +3.64% and a Zacks Rank #3 (Hold).

Black Hills Corp. (BKH - Snapshot Report), Earnings ESP of +2.38% and a Zacks Rank #3 (Hold).

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