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Chesapeake Utilities (CPK) Q3 Earnings: What's in Store?

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Chesapeake Utilities Corporation (CPK - Free Report) is set to report third-quarter 2018 results on Nov 8, before the market opens.

In the last reported quarter, the company witnessed a negative earnings surprise of 2.04%. However, it surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 7.96%.

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

Chesapeake Utilities Corporation Price and EPS Surprise

Factors to Consider for Q3

Chesapeake Utilities’ Northwest Florida project pipeline expansion, which came online in the second quarter, is expected to generate returns for the company and drive its bottom-line performance in the to-be-reported quarter. In addition, strong customer growth in its gas and electric distribution operations is likely to leave a positive impact on earnings.

The Zacks Consensus Estimate for total revenues in the quarter to be reported is pegged at $143 million, reflecting a 12.6% increase year over year. The consensus mark for earnings in the same period stands at 48 cents per share, representing a 14.3% rise from the year-ago period’s estimate.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Chesapeake Utilities in the quarter to be reported. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP:  Chesapeake Utilities has an Earnings ESP of 0.00% as the Most Accurate Estimate matches the Zacks Consensus Estimate.  You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Chesapeake Utilities carries a Zacks Rank #4 (Sell), which decreases the predictive power of ESP. Also, a 0.00% ESP makes surprise prediction difficult and uncertain for the stock. Therefore, this combination looks infeasible for a likely positive surprise.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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

Stocks to Consider

Investors can consider stocks from the same Utility - Gas Distribution industry comprising the right combination of elements to beat on earnings this time around.

Southwest Gas Corporation (SWX - Free Report) has an Earnings ESP of +82.14% and a Zacks Rank #3. The company is expected to report third-quarter 2018 results on Nov 6.

Sempra Energy (SRE - Free Report) is expected to release third-quarter 2018 results on Nov 7. The company has an Earnings ESP of +1.77% and a Zacks Rank of 3.

Spire Inc. (SR - Free Report) is expected to announce fourth-quarter fiscal 2018 results on Nov 15. The company has an Earnings ESP of +2.06% and is a Zacks #3 Ranked player.

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