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

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Consolidated Edison, Inc. (ED - Free Report) will report first-quarter 2018 results after the market closes on May 3.

In the last reported quarter, the company delivered a positive surprise of 2.56%. However, Consolidated Edison lagged the Zacks Consensus Estimate in two of the past four quarters, with an average miss of 0.05%.

Let’s see how things are shaping up for this earnings season.

Consolidated Edison Inc Price and EPS Surprise

Factors at Play

Of late, Consolidated Edison has been incorporating renewable energy in its grid at an increasing rate. As a result, its fourth-quarter 2017 results reflected higher revenues from renewable electric production projects. We expect the company’s first-quarter results to reflect the same.

Weather pattern tends to influence quarterly results of utility providers. During the first quarter, Consolidated Edison’s service territories witnessed fluctuating weather, which might impact its revenues.

The company’s regulated based utilities offer it with a stable earnings base. In line with this, the Zacks Consensus Estimate for the company’s first-quarter earnings of $1.33 reflects an improvement of 4.7% year over year.

In January 2018, the company announced a dividend hike of 10%, reflecting the 44th consecutive annual dividend rise. Such dividend hikes hint at a solid cash flow reserve for the company, which we expect to get reflected in the to-be-reported results.

Earnings Whisper

Our proven model shows that Consolidated Edison is unlikely to beat earnings this quarter. Notably, 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 elaborated below.

Zacks ESP: Consolidated Edison has an Earnings ESP of +0.30%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Consolidated Edison currently carries a Zacks Rank #4 (Sell).

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

Stocks That Warrant a Look

Here are some companies from the Zacks Utility sector you may want to consider as our model shows that these have the right combination of elements to post earnings beat this quarter:

Hawaiian Electric Industries, Inc. (HE - Free Report) has an Earnings ESP of +0.91% and a Zacks Rank #2. It is expected to report first-quarter 2018 results on May 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

IDACORP, Inc. (IDA - Free Report) has an Earnings ESP of +3.55% and carries a Zacks Rank #2. It is slated to report first-quarter results on May 3.

Ameren Corporation (AEE - Free Report) has an Earnings ESP of +1.45% and carries a Zacks Rank #3. It is slated to report first-quarter results on May 9.

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