Back to top

Image: Bigstock

ALLETE (ALE): What's in the Cards this Earnings Season?

Read MoreHide Full Article

ALLETE, Inc. (ALE - Free Report) is scheduled to report fourth-quarter results on Feb 15, before the market opens. Last quarter, the company delivered a positive earnings surprise of 3.13%. Let’s see how things are shaping up for this quarter.

Factors to Consider

Above-average temperatures in ALLETE’s service territories in the fourth quarter are expected to hit its top line.

ALLETE has been pursuing a strategy of using rider recovery for significant environmental, renewable and transmission investments. This year, ALLETE‘s subsidiary, Minnesota Power, is expected to generate nearly $100 million in current cost recovery rider revenue.

Earnings Whispers

Our proven model does not conclusively show that ALLETE will beat earnings this quarter. That 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. But that is not the case here, as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -5.48%. This is because the Most Accurate estimate stands at 69 cents and the Zacks Consensus Estimate is pegged at 73 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Allete, Inc. Price and EPS Surprise

Allete, Inc. Price and EPS Surprise | Allete, Inc. Quote

Zacks Rank: Though ALLETE’s Zacks Rank #3 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few stocks in the utility space worth considering as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Entergy Corporation (ETR - Free Report) is slated to report earnings on Feb 15. It is has an Earnings ESP of +9.09% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

FirstEnergy Corp. (FE - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #3. It is expected to release its quarterly numbers on Feb 21.

Pinnacle West Capital Corporation (PNW - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #2. It is slated to report earnings on Feb 24.

Zacks’ Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?

Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>

Published in