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Analyst Blog

Public Service Enterprise Group Inc. (PEG - Analyst Report) is set to report fourth quarter and full year 2012 results on Feb 21, 2013. Last quarter the company posted a 4.17% positive earnings surprise. Let’s see how things are shaping up prior to this announcement.

Factors to Consider This Quarter

Public Service Enterprise Group is one of the companies that were adversely affected by Superstorm Sandy. Going forward, apart from the restoration costs for hurricane Sandy, the increasing cost of coal, higher pension & financial costs and power-price volatility are areas of concern.

However, the low-cost nuclear fleet, operational excellence, disciplined investment and added generating capacities would act as an offset to these concerns. Also, the diversified utility’s robust portfolio of regulated and non-regulated assets ensures a steady earnings base with significant long-term growth prospects.

Earnings Whispers?

Our proven model does not conclusively show that Public Service Enterprise Group is likely to beat earnings this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Negative Zacks ESP:  This is because the Most Accurate estimate stands at 37 cents per share while the Zacks Consensus Estimate is at 39 cents per share. That is a difference of -5.13%.

Zacks #3 Rank (Hold): Public Service Enterprise’s Zacks Rank #3 (Hold) when combined with a negative earnings ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

NV Energy, Inc. , earnings ESP of +14.29% and Zacks #3 Rank (Hold).

Dynegy Inc. (DYN - Snapshot Report), earnings ESP of +75% and Zacks #3 Rank (Hold).

PG&E Corp. (PCG - Analyst Report), earnings ESP of +1.75% and Zacks# 3 Rank (Hold).

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