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What to Expect From Enbridge's (ENB) Q3 Earnings Report

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Enbridge Inc. (ENB - Free Report) is scheduled to report third-quarter 2021 earnings on Nov 5, before the opening bell.  

In the last reported quarter, the leading energy infrastructure company’s adjusted earnings per share of 55 cents beat the Zacks Consensus Estimate of 44 cents, thanks to increased contributions from Mainline System and Regional Oil Sands System.

Let’s see how things have shaped up prior to the third-quarter earnings announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings per share of 46 cents has witnessed two upward revisions and no downward movement over the past 30 days. The estimated figure suggests an increase of 27.8% from the prior-year reported number.

Enbridge’s earnings beat the Zacks Consensus Estimate twice and missed on the other two occasions in the trailing four quarters, with the average surprise being 4.8%. This is depicted in the graph below:

Enbridge Inc Price and EPS Surprise

Enbridge Inc Price and EPS Surprise

Enbridge Inc price-eps-surprise | Enbridge Inc Quote

Factors to Consider

Enbridge, a leading North American midstream energy firm, is likely to have generated stable fee-based revenues in the third quarter from its massive crude and liquids pipeline system that spreads across 17,127 miles. With a significant recovery in energy demand in the third quarter, the company’s pipelines might have seen higher utilization rates. Crude and gas prices in the quarter witnessed a massive jump, which is expected to have triggered higher activities in the North American upstream market. This, in turn, is likely to have boosted Enbridge’s profits in the September quarter from the year-ago period.

Yet, contributions from the Energy Services segment are expected to have remained under pressure in the quarter, which might have partially offset the positives from higher commodity flows. This has made an earnings beat uncertain for Enbridge for the third quarter. Some other midstream operators including Kinder Morgan Inc (KMI - Free Report) and DCP Midstream, LP (DCP - Free Report) missed earnings estimates for the third quarter despite major improvements in the energy spectrum.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Enbridge this time around. That is because 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. That is not the case here as you will see below.

Earnings ESP: Enbridge has an Earnings ESP of -0.91%. This is because the Most Accurate Estimate for the quarter is currently pegged at 45 cents per share, lower than the Zacks Consensus Estimate of 46 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Enbridge currently carries a Zacks Rank #2.

Energy Stock With Favorable Combination

Here’s a company from the Energy space that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat in the upcoming quarterly report:

Targa Resources Corp. (TRGP - Free Report) has an Earnings ESP of +4.00% and a Zacks Rank #1. The firm is scheduled to release quarterly earnings on Nov 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

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