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CMS Energy (CMS) to Post Q1 Earnings: What's in the Cards?

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CMS Energy Corporation (CMS - Free Report) is set to report first-quarter 2019 financial results on Apr 25, before the market opens. In the last reported quarter, the company delivered a negative earnings surprise of 2.44%. In the trailing four quarters, CMS Energy came up with average positive earnings surprise of 5.76%.

Let's take a closer look at the factors influencing the company’s quarterly results.

Factors Under Consideration

CMS Energy’s regulated electric power operations in Michigan has been generating relatively stable earnings for the last few quarters. Moreover, during the first quarter, the company’s service territories experienced below-normal temperatures, subsequently witnessing cold winters. This, in turn, resulted in record demand for its gas systems. These factors may have a favorable impact on its revenues in the upcoming quarterly results.

However, the company’s service territories witnessed hail and damaging winds toward the end of the first quarter that may have increased CMS Energy’s operating expenses. This may have hurt the company’s bottom line in the to-be-reported quarter. Considering this, the Zacks Consensus Estimate for first-quarter earnings is pegged at 77 cents, suggesting a decline of 10.5% from the figure reported in the year-ago quarter.

During the first quarter, CMS Energy announced a 7% hike in its quarterly dividend. This indicates improved profitability for the company, which is expected to get reflected in the form of increased cash flow in the upcoming quarterly result.

Earnings Whispers

Our proven model does not conclusively show that CMS Energy is likely to beat on earnings 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: CMS Energy has an Earnings ESP of -0.77%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #4 (Sell), further making the surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

CMS Energy Corporation Price and EPS Surprise

 

Stocks to Consider

Here are a few players from the Utilities sector that have the right combination of elements to post an earnings beat this quarter.

NextEra Energy, Inc. (NEE - Free Report) has an Earnings ESP of +2.64% and a Zacks Rank #3. The company is scheduled to release first- quarter results on Apr 23. You can see the complete list of today’s Zacks #1 Rank stocks here.

Consolidated Edison Inc. (ED - Free Report) has an Earnings ESP of +1.34% and a Zacks Rank #3. The company is scheduled to report first-quarter results on May 2.

Ameren Corp. (AEE - Free Report) has an Earnings ESP of +3.70% and a Zacks Rank #3. The company is scheduled to report first-quarter results on May 9.

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