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Is a Beat in the Offing for Enbridge (ENB) in Q1 Earnings?

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Enbridge Inc. (ENB - Free Report) is scheduled to release first-quarter 2021 results on May 7, before the opening bell.

In the last reported quarter, it came up with earnings per share of 43 cents, missing the Zacks Consensus Estimate of 46 cents owing to a decrease in contributions from the U.S. and Canadian Gas Transmission businesses as well as higher loss on the Energy Services front.

The midstream energy company beat earnings estimates once, missed twice and met the same once in the trailing four quarters, the average surprise being 1.3%.

Enbridge Inc Price and EPS Surprise

 

Enbridge Inc Price and EPS Surprise

Enbridge Inc price-eps-surprise | Enbridge Inc Quote

Let’s see how things have shaped up prior to the announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for first-quarter earnings of 55 cents has seen no upward revision and one downward movement in the past 30 days. The figure suggests a year-over-year decrease of 11.3%.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Enbridge this time around. This is because it has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Enbridge has an Earnings ESP of +3.26%. This is because the Most Accurate Estimate is pegged at 57 cents versus the Zacks Consensus Estimate of 55 cents per share.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3.

Factors Driving the Better-Than-Expected Earnings

Enbridge has an extensive network of pipeline assets that is responsible for transporting roughly 25% of North American crude oil production. The midstream properties are also responsible for carrying as much as 20% of the natural gas consumed by Americans. In Ontario and Quebec, the company is dedicatedly serving 3.8 million retail customers through its Gas Distribution and Storage operations.

With significant portion of its assets being contracted by shippers for long term, the company’s business model is less exposed to volatility in oil and gas prices owing to the coronavirus pandemic. Underpinned by long-term contracts, Enbridge’s business model also has considerably lower volume risk exposure.

Thus, with low exposure to volume risks and commodity price volatility, the company is likely to have generated stable fee-based revenues in the March quarter.

Other Stocks to Consider

Some other energy stocks with the perfect mix of elements to beat on earnings in the upcoming quarterly releases are:

NOW Inc. (DNOW - Free Report) has an Earnings ESP of +39.13% and a Zacks Rank of 2. It is scheduled to report first-quarter results on May 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pembina Pipeline Corporation (PBA - Free Report) has an Earnings ESP of +2.22% and is a Zacks #3 Ranked player. The company is scheduled to release first-quarter results on May 6. 

Cimarex Energy Co. (XEC - Free Report) has an Earnings ESP of +10.55% and a Zacks Rank of 3. It is scheduled to report first-quarter results on May 5.

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Enbridge Inc (ENB) - free report >>

Cimarex Energy Co (XEC) - free report >>

NOW Inc. (DNOW) - free report >>

Pembina Pipeline Corp. (PBA) - free report >>