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DTE Energy (DTE) to Report Q3 Earnings: Is a Beat in Store?

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DTE Energy Company (DTE - Free Report) is slated to report third-quarter 2018 results on Oct 24, before the opening bell.

In the last reported quarter, the company delivered a positive earnings surprise of 22.52%. Its bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 5.69%.

Why a Positive Surprise is Likely

Our proven model shows that DTE Energy is likely to beat on earnings because it has the right combination of the two key ingredients. 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.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: The company currently has an Earnings ESP of +1.18% as the Most Accurate Estimate is pegged at $1.71 per share, higher than the Zacks Consensus Estimate of $1.69.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

DTE Energy Company Price and EPS Surprise

 

DTE Energy Company Price and EPS Surprise | DTE Energy Company Quote

 

Zacks Rank: DTE Energy currently carries a Zacks Rank #3. The combination of DTE Energy’s Zacks Rank #3 and +1.18% ESP makes us quite confident that the company is poised for an earnings beat in the quarter to be reported.

We caution against Zacks Rank #4 or 5 stocks (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Factors at Play

During most parts of the third quarter, DTE Energy’s service territories witnessed above-normal temperatures. This indicates a higher demand for electricity, which in turn, should boost the company’s electric segment’s revenues in the quarter under review.

However, DTE Energy announced that starting from July 2018; it reduced its gas rates to reflect the latest U.S. tax reforms. Although this strategy is likely to aid the company in the long run, such reduction may lower gas bill for DTE Energy’s customers in the third quarter. This, in turn, can weigh on DTE Energy’s gas revenues in the soon-to-be-reported quarter.

On the bottom-line front, the company expects to continue witnessing solid earnings growth in the second half of 2018 as it did in the first half, driven by favorable weather patterns, new rate implementations and lower corporate taxes. In line with this, the Zacks consensus estimate for DTE Energy’s earnings of $1.69 per share for the yet-to-be-reported quarter reflects a year-over-year increase of 14.2%.

Other Stocks to Consider

In addition to DTE Energy, investors can also consider the following players from the industry that also have the right combination of elements to post an earnings beat in the to-be-reported quarter.

American Electric Power (AEP - Free Report) is anticipated to release third-quarter 2018 results on Oct 25. It has an Earnings ESP of +8.12% and a Zacks Rank #2.

FirstEnergy Corporation (FE - Free Report) is expected to release third-quarter 2018 numbers on Oct 25. It has an Earnings ESP of +0.35% and carries a Zacks Rank of 2.

Eversource Energy (ES - Free Report) is anticipated to release third-quarter 2018 results on Nov 2. It has an Earnings ESP of +1.54% and a Zacks Rank #2.

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