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American Electric (AEP) Q1 Earnings: What's in the Cards?
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American Electric Power Company, Inc. (AEP - Free Report) is set to release first-quarter 2018 results on Apr 26, before the market opens. Last quarter, this electric utility reported a positive earnings surprise of 4.94%.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
American Electric filed several rate cases in Indiana, Michigan, Kentucky, Oklahoma and Texas in 2017, outcomes from which are expected by management in first half of 2018. Thus, we believe that the upcoming results are likely to be impacted by the developments of these rate cases.
GDP growth in the company’s service territory exceeded that of the United States in the fourth quarter of 2017, courtesy of higher energy prices and the strong global economy. Moreover, rise in employment in its service territory hints at improved purchasing power and thus a notable residential sales growth for American Electric is expected in the near term.
However, the company’s commercial sales were drab in the fourth quarter of 2017. Considering this trend to continue in the to-be-reported quarter as well, the Zacks Consensus Estimate for American Electric’s first-quarter revenue estimate of $3.74 billion, reflects an annual decline of 4.9%.
On the other hand, lower tax rates courtesy of the latest tax reform is expected to boost American Electric’s quarterly bottom line. The Zacks Consensus Estimate for the company’s first-quarter earnings reflects 4.2% improvement.
Earnings Whispers
Our proven model does not conclusively show an earnings beat for American Electric 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: American Electric has an Earnings ESP of -0.05%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Electric carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Note that 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.
American Electric Power Company, Inc. Price and EPS Surprise
Here are a few operators in the Utility space that you may consider, as our model shows that they have the right combination of elements to deliver an earnings beat this quarter:
CenterPoint Energy (CNP - Free Report) has an Earnings ESP of +0.20% and a Zacks Rank #2. The company is scheduled to report first-quarter results on May 4.
The AES Corp. (AES - Free Report) has an Earnings ESP of +10.20% and a Zacks Rank #2. The company is scheduled to report first-quarter results on May 8.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
American Electric (AEP) Q1 Earnings: What's in the Cards?
American Electric Power Company, Inc. (AEP - Free Report) is set to release first-quarter 2018 results on Apr 26, before the market opens. Last quarter, this electric utility reported a positive earnings surprise of 4.94%.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
American Electric filed several rate cases in Indiana, Michigan, Kentucky, Oklahoma and Texas in 2017, outcomes from which are expected by management in first half of 2018. Thus, we believe that the upcoming results are likely to be impacted by the developments of these rate cases.
GDP growth in the company’s service territory exceeded that of the United States in the fourth quarter of 2017, courtesy of higher energy prices and the strong global economy. Moreover, rise in employment in its service territory hints at improved purchasing power and thus a notable residential sales growth for American Electric is expected in the near term.
However, the company’s commercial sales were drab in the fourth quarter of 2017. Considering this trend to continue in the to-be-reported quarter as well, the Zacks Consensus Estimate for American Electric’s first-quarter revenue estimate of $3.74 billion, reflects an annual decline of 4.9%.
On the other hand, lower tax rates courtesy of the latest tax reform is expected to boost American Electric’s quarterly bottom line. The Zacks Consensus Estimate for the company’s first-quarter earnings reflects 4.2% improvement.
Earnings Whispers
Our proven model does not conclusively show an earnings beat for American Electric 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: American Electric has an Earnings ESP of -0.05%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Electric carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Note that 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.
American Electric Power Company, Inc. Price and EPS Surprise
American Electric Power Company, Inc. Price and EPS Surprise | American Electric Power Company, Inc. Quote
Stocks to Consider
Here are a few operators in the Utility space that you may consider, as our model shows that they have the right combination of elements to deliver an earnings beat this quarter:
CMS Energy (CMS - Free Report) has an Earnings ESP of +2.08% and a Zacks Rank #2. The company is scheduled to report first-quarter results on Apr 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
CenterPoint Energy (CNP - Free Report) has an Earnings ESP of +0.20% and a Zacks Rank #2. The company is scheduled to report first-quarter results on May 4.
The AES Corp. (AES - Free Report) has an Earnings ESP of +10.20% and a Zacks Rank #2. The company is scheduled to report first-quarter results on May 8.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>