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Is a Beat in the Cards for NiSource (NI) in Q1 Earnings?

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We expect NiSource (NI - Free Report) to beat expectations when it reports first-quarter 2017 results before the market opens on May 3. Last quarter, this fully-regulated utility company delivered a negative earnings surprise of 2.94%.

Why a Likely Positive Surprise?

Our proven model shows that NiSource is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates and NiSource has the right mix.

Zacks ESP: The Earnings ESP which represents the difference between the Most Accurate estimate of 67 cents and the Zacks Consensus Estimate of 65 cents is +3.08%. This is a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

NiSource, Inc Price and EPS Surprise

 

NiSource, Inc Price and EPS Surprise | NiSource, Inc Quote

Zacks Rank: NiSource currently carries a Zacks Rank #2. The combination of NiSource’s favorable Zacks Rank and positive ESP makes us reasonably confident of a positive surprise this season.

Conversely, we caution against with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Factors to Consider

NiSource completed significant regulatory initiatives including gas base rate case settlement approvals in Kentucky, Maryland and Pennsylvania. It also received approvals of settlements in a long-term electric modernization program and electric base rate case in Indiana.

These new approved rates will significantly add to first-quarter revenues of NiSource.

The company also added more than 30,000 new natural gas customers in 2016, the highest since 2006. Customer addition will continue to contribute to the company’s top-line.

On the other hand, delay in completion of projects along with inconsistent weather condition, might affect the company’s results.

Other Stocks to Consider

NiSource is not the only Zacks Categorized Utility – Electric Power company looking up this earnings season. We see likely earnings beats coming from these companies as well.

PPL Corporation (PPL - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank #3. It is slated to report first-quarter 2017 earnings on May 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dominion Resources, Inc. (D - Free Report) has an Earnings ESP of +2.15% and a Zacks Rank #3. It is slated to report first-quarter 2017 earnings on May 4.

Pattern Energy Group Inc. has an Earnings ESP of + 300% and a Zacks Rank #3. It is slated to report first-quarter 2017 earnings on May 9.

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