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Eversource Energy (ES) Q3 Earnings: What's in the Cards?
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Eversource Energy (ES - Free Report) is set to report third-quarter 2016 results before the opening bell on Nov 2.
Last quarter, the company reported earnings in line with estimates, bringing the average negative surprise to 2.24% for the trailing four quarters. Let’s see how things are shaping up for this announcement.
Factors at Play
Above-average temperatures in its service territories – Connecticut, New Hampshire and Massachusetts – in the third quarter are expected to drive top-line growth at Eversource Energy. The company is primarily engaged in the transmission and distribution of electricity and natural gas.
During the second quarter, the company received the Connecticut Siting Council’s approval for a new $50 million transmission line, located west of Hartford, along with a series of improvements in the Bloomfield-Windsor area, north of Hartford. The company is expected to have started construction of both the projects in the to-be-reported quarter.
Further, at the beginning of the third quarter, the company received an approval from the New Hampshire Site Evaluation Committee for the Merrimack Valley Reliability Project. As per the project’s terms, Eversource Energy and National Grid will jointly build an overhead transmission line in Massachusetts and New Hampshire. Construction of the project has likely begun by now.
Moreover, on Jul 1, the New Hampshire Public Utilities Commission (PUC) approved Eversource Energy’s comprehensive settlement with numerous state officials and other parties to divest the Public Service of New Hampshire (PSNH) power plant. The agreement is focused on providing customer savings and resolving other related issues currently under review by state regulators. The New Hampshire PUC will now select an auction advisor to assist in the sale of the plants. Management had earlier announced its expectation of a final selection in Sep 2016.
On the flip side, Eversource Energy’s strategic development opportunities in both the electric and natural gas transmission markets may not be successful and projects may not commence operations or be completed on schedule, which could have a material impact on its business prospects. Long-term projects could be postponed due to various factors like a delay in regulatory approval processes, new legislation, difficulties in obtaining required rights of way, and design and siting issues.
Earnings Whispers
Our proven model does not conclusively show that Eversource Energy is likely to beat earnings 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) to be able to beat consensus estimates. However, that is not the case here, as you will see below.
Zacks ESP: The Most Accurate estimate stands at 78 cents while the Zacks Consensus Estimate is pegged at 80 cents, resulting in an Earnings ESP of -2.50%.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Although Eversource Energy’s Zacks Rank #3 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks in the utility-electric power space that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this season:
Pattern Energy Group, Inc. is slated to report second-quarter 2016 results on Nov 7. The company has an Earnings ESP of +16.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Avista Corp. (AVA - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #2. The company is slated to report third-quarter 2016 results on Nov 1.
Ameren Corporation (AEE - Free Report) has an Earnings ESP of +2.90% and a Zacks Rank #2. The company is slated to announce third-quarter 2016 earnings on Nov 4.
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Eversource Energy (ES) Q3 Earnings: What's in the Cards?
Eversource Energy (ES - Free Report) is set to report third-quarter 2016 results before the opening bell on Nov 2.
Last quarter, the company reported earnings in line with estimates, bringing the average negative surprise to 2.24% for the trailing four quarters. Let’s see how things are shaping up for this announcement.
Factors at Play
Above-average temperatures in its service territories – Connecticut, New Hampshire and Massachusetts – in the third quarter are expected to drive top-line growth at Eversource Energy. The company is primarily engaged in the transmission and distribution of electricity and natural gas.
During the second quarter, the company received the Connecticut Siting Council’s approval for a new $50 million transmission line, located west of Hartford, along with a series of improvements in the Bloomfield-Windsor area, north of Hartford. The company is expected to have started construction of both the projects in the to-be-reported quarter.
EVERSOURCE EGY Price and EPS Surprise
EVERSOURCE EGY Price and EPS Surprise | EVERSOURCE EGY Quote
Further, at the beginning of the third quarter, the company received an approval from the New Hampshire Site Evaluation Committee for the Merrimack Valley Reliability Project. As per the project’s terms, Eversource Energy and National Grid will jointly build an overhead transmission line in Massachusetts and New Hampshire. Construction of the project has likely begun by now.
Moreover, on Jul 1, the New Hampshire Public Utilities Commission (PUC) approved Eversource Energy’s comprehensive settlement with numerous state officials and other parties to divest the Public Service of New Hampshire (PSNH) power plant. The agreement is focused on providing customer savings and resolving other related issues currently under review by state regulators. The New Hampshire PUC will now select an auction advisor to assist in the sale of the plants. Management had earlier announced its expectation of a final selection in Sep 2016.
On the flip side, Eversource Energy’s strategic development opportunities in both the electric and natural gas transmission markets may not be successful and projects may not commence operations or be completed on schedule, which could have a material impact on its business prospects. Long-term projects could be postponed due to various factors like a delay in regulatory approval processes, new legislation, difficulties in obtaining required rights of way, and design and siting issues.
Earnings Whispers
Our proven model does not conclusively show that Eversource Energy is likely to beat earnings 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) to be able to beat consensus estimates. However, that is not the case here, as you will see below.
Zacks ESP: The Most Accurate estimate stands at 78 cents while the Zacks Consensus Estimate is pegged at 80 cents, resulting in an Earnings ESP of -2.50%.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Although Eversource Energy’s Zacks Rank #3 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks in the utility-electric power space that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this season:
Pattern Energy Group, Inc. is slated to report second-quarter 2016 results on Nov 7. The company has an Earnings ESP of +16.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Avista Corp. (AVA - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #2. The company is slated to report third-quarter 2016 results on Nov 1.
Ameren Corporation (AEE - Free Report) has an Earnings ESP of +2.90% and a Zacks Rank #2. The company is slated to announce third-quarter 2016 earnings on Nov 4.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>