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Will NextEra Energy (NEE) Earnings Disappoint this Season?

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NextEra Energy Inc. (NEE - Free Report) will release its third-quarter 2014 financial results before market open on Oct 31. In the prior quarter, this electric utility reported a negative earnings surprise of 1.30%. Let’s see how things are shaping up at NextEra Energy prior to this announcement.

Factors to Consider this Quarter

A milder summer this year is expected to have a negative impact on power demand. NextEra Energy’s third-quarter earnings are thus expected to decline year over year.

On the other hand, a gradual improvement in the Florida economy and focus on renewable energy are going to benefit the company this quarter.

Earnings Whispers

Our proven model indicates that NextEra Energy does not have the right combination of elements to secure an earnings beat. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here.

Negative Zacks ESP: This is because the Most Accurate estimate stands at $1.52 while the Zacks Consensus Estimate is $1.54, resulting in -1.30% ESP.

Zacks Rank: NextEra Energy has a Zacks Rank #3 (Hold) which when combined with a negative ESP makes an earnings surprise prediction difficult.

We particularly caution against stocks with Zacks Ranks #4 and 5 going into the earnings season.

Other Stocks to Consider

Here are some utilities worth considering on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter.

NRG Yield, Inc. has an earnings ESP of +75.44% and a Zacks Rank #1 (Strong Buy).

Consolidated Edison, Inc. (ED - Free Report) has an earnings ESP of +2.80% and a Zacks Rank #2 (Buy).

The Empire District Electric Company has an earnings ESP of +8.89% and a Zacks Rank #2 (Buy).

In-Depth Zacks Research for the Tickers Above

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NextEra Energy, Inc. (NEE) - free report >>

Consolidated Edison Inc (ED) - free report >>

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