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Consolidated Edison (ED) Q1 Earnings: What's in the Cards?

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New York-based Consolidated Edison, Inc. (ED - Free Report) is set to release first-quarter 2017 results after the closing bell on May 4.

Last quarter, the company posted an earnings surprise of 2.99%. Moreover, the company surpassed the Zacks Consensus Estimate in three of the past four quarters, with an average earnings surprise of 1.47%.

Let’s see how things are shaping up at the company prior to this announcement.

Factors at Play

Consolidated Edison continues to follow a systematic capital investment plan for infrastructure development and the expansion of renewable assets. In 2017, the company plans to invest $450 million in renewable electric production projects. We expect the upcoming first quarter’s results to reflect a portion of this investment.

In line with this strategy, at the beginning of the first-quarter reporting cycle, the company purchased Juhl Energy Services, Inc., a development pipeline of wind projects and portfolio of operating projects from Juhl Energy.Post acquisition, the company owns three operating wind projects having a total capacity of 36 megawatts (MW).

Consolidated Edison has acquired Juhl Energy Service Inc.’s operating and maintenance (O&M) services business as well as its interest in a pipeline of wind projects of approximately 500 MW in the Mid-West. Based on Juhl’s impressive track record in its service territories, positive synergy can be expected from this deal to get reflected in the to-be-reported quarter’s results.

However, the company's service territories witnessed warmer-than-normal temperatures during the first quarter. This will result in lower household expenditure on heating and, in turn, might adversely impact revenues for this energy provider.

For the first quarter, the Zacks Consensus Estimate for earnings reflects an increase of 1.02% year-over-year, while sales are anticipated to drop 3% to $3.06 billion.

Consolidated Edison Inc Price and EPS Surprise

 

Consolidated Edison Inc Price and EPS Surprise | Consolidated Edison Inc Quote

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Consolidated Edison 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. This is not the case here, as you will see below.

Zacks ESP: Consolidated Edison has an Earnings ESP of -1.68%. This is because the Most Accurate estimate stands at $1.17, lower than the Zacks Consensus Estimate of $1.19. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Consolidated Edison carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s Earnings ESP of -1.68% makes surprise prediction difficult.

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

Stocks that Warrant a Look

Here are a few stocks in the Utility space worth considering on the basis of our model which shows that they have the right combination to pull off a beat:

NiSource, Inc. (NI - Free Report) will report first-quarter results on May 3. The company has an Earnings ESP of +6.15% and a Zacks Rank #2.

Pattern Energy Group, Inc. has an Earnings ESP of +250.00% and a Zacks Rank #3. The company is expected to report first-quarter results on May 9. You can see the complete list of today’s Zacks #1 Rank stocks here.

The AES Corporation (AES - Free Report) has an Earnings ESP of +15.79% and a Zacks Rank #3. The company is slated to release first-quarter results on May 8.

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