Dominion Resources, Inc. (D - Free Report) will release second-quarter 2016 financial results before the market opens on Aug 3. Last quarter, this electric utility came out with on par earnings. Let’s see how things are shaping up at the company prior to this announcement.
Factors to Consider
Second-quarter earnings of this utility are expected to be adversely impacted by share dilution and outage at its Millstone Unit 3. The Millstone Unit 3 reactor had to be shut down due to a hydrogen gas leak during the quarter. The unplanned outage followed a planned outage for refueling.
Dominion Resources expects to generate second-quarter 2016 operating earnings in a range of 65 to 75 cents per share compared with 73 cents in the year-ago period. Despite warmer-than-normal temperatures, earnings are likely to be affected by the aforesaid reasons.
Our proven model does not conclusively show that Dominion Resources is likely to beat estimates this quarter. 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. But, that is not the case here as you will see below.
Zacks ESP: The Most Accurate estimate is pegged at 70 cents while the Zacks Consensus Estimate is 71 cents, resulting in an Earnings ESP of -1.41%.
Zacks Rank: Though Dominion Resources’ Zacks Rank #3 increases the predictive power of the ESP, its -1.41% ESP makes a beat unlikely this quarter.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few stocks in the utility space worth considering as our model shows that thy have the right combination of elements to beat estimates this quarter:
Exelon Corporation (EXC - Free Report) has an Earnings ESP of +1.79% and a Zacks Rank #3. The company is expected to release second-quarter 2016 results on Aug 9, before the market opens.
Avista Corporation (AVA - Free Report) has an Earnings ESP of +2.33% and a Zacks Rank #2. The company is expected to release second-quarter 2016 results on Aug 3, before the market opens.
Duke Energy Corporation (DUK - Free Report) has an Earnings ESP of +2.0% and a Zacks Rank #3. It is expected to report second-quarter earnings before the market opens on Aug 4.
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