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Will Consolidated Edison (ED) Disappoint in Q2 Earnings?

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New York-based Consolidated Edison, Inc. (ED - Free Report) is set to release second-quarter 2017 results on Aug 3, after the closing bell.

Last quarter, the company delivered a positive earnings surprise of 6.72%. Also, it surpassed the Zacks Consensus Estimate in the last four quarters, with an average earnings beat of 3.97%.

Let’s see how things are shaping up at the company prior to this announcement.

Factors at Play

Consolidated Edison continues to follow a systematic capital investment plan for infrastructure development and the expansion of renewable assets. To this end, the company plans to invest $450 million in renewable electric production projects in 2017. Hence, we expect the upcoming second-quarter’s results to reflect a fraction of this investment.

However, the company's service territories witnessed warmer-than-normal temperatures during the quarter. This will result in lower household expenditure on heating and, in turn, might adversely impact revenues for this energy provider.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings reflects a decline of 21.30% year over year, whereas sales are anticipated to drop 0.01% to $2.79 billion.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Consolidated Edison this quarter. This 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 not the case here, as you will see below.

Zacks ESP: Consolidated Edison has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 61 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Consolidated Edison carries a Zacks Rank #4 (Sell).

As it is we caution you 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 that Warrant a Look

Here are a few stocks in the Utility space worth considering on the basis of our model which shows that they have the right combination to post an earnings beat this quarter:

NiSource, Inc. (NI - Free Report) will report second-quarter results on Aug 2. The company has an Earnings ESP of +10.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pattern Energy Group, Inc. (PEGI - Free Report) has an Earnings ESP of +23.08% and a Zacks Rank #2. The company is expected to report second-quarter results on Aug 4.

Pinnacle West Capital Corporation (PNW - Free Report) has an Earnings ESP of +4.31% and a Zacks Rank #3. The company is slated to release second-quarter results on Aug 3.

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