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Is Consolidated Edison (ED) Poised to Beat on Q3 Earnings?

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Consolidated Edison (ED - Free Report) will release third-quarter 2018 results on Nov 1, before the opening bell.

In the last reported quarter, the company delivered a positive earnings surprise of 7.02%. Moreover, Consolidated Edison has surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 2.01%.

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

Why a Likely Positive Surprise?

Our proven model shows that Consolidated Edison is likely to beat earnings estimates in the third quarter. Notably, 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. And Consolidated Edison has both these attributes.

Earnings ESP: Consolidated Edison has an Earnings ESP of +1.04%. 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 #3, which along with a positive Earnings ESP, increases the possibility of an earnings beat.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc Price and EPS Surprise | Consolidated Edison Inc Quote

Factors Under Consideration

During the third quarter, thunderstorms and heavy rain led to flooding in parts of Pennsylvania, New York and New Jersey. This may have caused a few outages leading to disruption in smooth power supply, across the company’s service territories. As a result, temperature is most likely to have an unfavorable impact on Consolidated Edison's revenues in the to-be-reported quarter.

In line with this, the Zacks Consensus Estimate for the company’s third-quarter revenues of $3,172 million reflects a decline of 1.2% year over year.

Consolidated Edison’s regulated utilities continue to provide the company with a stable earnings base coupled with positive outcomes from the rate hike appeal by its utilities. In the second quarter earnings, the company's results of operations reflected lower income tax expenses. We anticipate a similar trend to follow during the third quarter as well.

Furthermore, Consolidated Edison expects macroeconomic factors to boost industrial growth in its service territories, which, in turn, should improve demand for electricity. We may expect the upcoming results to duly reflect these developments. Considering this, the Zacks Consensus Estimate for the company’s third-quarter earnings stands at $1.48 per share, reflecting an annual rise of 0.7%.

Other Stocks That Warrant a Look

Here are a few operators in the Utility space you may consider, as our model shows that they have the right combination of elements to deliver an earnings beat this quarter:

The AES Corp. (AES - Free Report) has an Earnings ESP of +1.43% and a Zacks Rank #2. The company is scheduled to report third-quarter results on Nov 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ameren Corporation (AEE - Free Report) has an Earnings ESP of +8.65% and a Zacks Rank #1. The company is scheduled to report third-quarter results on Oct 31.

Alliant Energy (LNT - Free Report) has an Earnings ESP of +1.19% and a Zacks Rank #3. The company is scheduled to report third-quarter results on Nov 6.

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