American Electric Power (AEP - Free Report) is set to release second-quarter 2017 financial results on Jul 27, before the market opens. Last quarter, this power management company posted a negative earnings surprise of 1.03%.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
American Electric is highly dependent on coal. Therefore, President Trump’s emphasis on improving the coal industry and relaxing the stringent environmental regulations can boost the company’s prospects over the long run.
American Electric is expected to benefit from the improving economic conditions in its service territories, plus its efficient cost management initiatives will also going to help.
Ohio and Texas represents more than one-half of utility revenues of the company and the power generation from these states is deregulated. The current lower price environment will hurt earnings of American Electric Power as substantial portion of its production is deregulated.
Zacks ESP: The Most Accurate estimate is at 81 cents while the Zacks Consensus Estimate is pegged at 87 cents, resulting in an Earnings ESP of -6.90%.
Zacks Rank: American Electric carries a Zacks Rank #4 (Sell). 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 a few companies in the utility sector that have the right combination of elements to post an earnings beat this quarter.
Xcel Energy Inc. (XEL - Free Report) has an Earnings ESP of +2.38% and holds a Zacks Rank #3. It is slated to report second-quarter 2017 results on Jul 27.
Pattern Energy Group Inc. (PEGI - Free Report) has an Earnings ESP of +23.08% and carries a Zacks Rank #2. It is slated to report second-quarter 2017 results on Aug 4.
The AES Corporation (AES - Free Report) has an Earnings ESP of +20.00% and holds a Zacks Rank #2. It is slated to report second-quarter 2017 results on Aug 8.
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