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Chesapeake Utilities (CPK) Q4 Earnings: A Beat in the Cards?

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Chesapeake Utilities Corporation (CPK - Free Report) will release fourth-quarter 2016 financial results before the market opens on Feb 28, 2017. In the prior quarter, this gas distributor reported a negative earnings surprise of 29.27%. We expect the company will beat earnings estimate this season.

Why a Likely Positive Surprise?

Our proven model shows that Chesapeake Utilities is likely to beat earnings because it has the right combination of two key ingredients. 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. This is the case here.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate of 76 cents and the Zacks Consensus Estimate of 73 cents, is +4.11%. This is a meaningful indicator of a likely positive earnings surprise for the shares. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The combination of Chesapeake Utilities’ Zacks Rank #3 and +4.11% ESP makes us reasonably confident of a likely earnings beat.

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

What is Driving Better-Than-Expected Earnings?

Chesapeake Utilities is expected to benefit from the new customer-driven increase in gas demand.

The new rate hike approved in Delaware Division and Maryland will boost the performance of the company.

Other Stocks to Consider

Other favorable stocks from the Utility sector worth considering as per our model are,

Spark Energy is slated to report earnings on Mar 3. It is has an Earnings ESP of +14.43% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lumos Networks Corp. is slated to report earnings on Mar 7. It is has an Earnings ESP of +40.00% and carries a Zacks Rank #3.

Peer Release

ONE Gas Inc. (OGS - Free Report) reported positive earnings surprise of 2.56% in the last quarter. The company sports a Zacks Rank#1 and surpassed the estimates in last four quarters.

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