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Enbridge (ENB) to Report Q1 Earnings: What's in the Cards?

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Enbridge Inc. (ENB - Free Report) is expected to report first-quarter 2019 earnings on May 10, before the opening bell.

The energy infrastructure player beat the Zacks Consensus Estimate in three of the last four quarters, the average positive surprise being 31.8%. Let’s see how things are shaping up for this announcement.

Which Way Are Estimates Trending?

Let’s take a look at estimate revisions to get a clear picture of what analysts think about the company’s upcoming earnings release.

The Zacks Consensus Estimate for first-quarter earnings of 51 cents has seen one upward and a downward revision by firms in the past 30 days. It reflects a year-over-year decline of almost 38%.

Enbridge Inc Price and EPS Surprise

 

Enbridge Inc Price and EPS Surprise | Enbridge Inc Quote

 

Factors at Play

Enbridge is the operator of the longest and most advanced oil and liquids pipeline in the world. Notably, the company is responsible for the transmission of 25% North American oil. Moreover, Enbridge transports roughly 18% of the continent’s natural gas. Importantly, the company’s midstream assets connect the key markets, with most of the prolific natural gas plays in North America.

From the extensive networks of midstream properties, transporting the commodities, the company is likely to generate stable fee-based revenues.

The company is also likely to earn handsome cashflow from natural gas utility business in North America. In the continent, Enbridge is the largest natural gas utility in terms of volumes of natural gas distributed to the growing customer base.

What Does Our Model Unveil?

Our proven model does not conclusively show that Enbridge is likely to beat the Zacks Consensus Estimate in the quarter to be reported. 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. Unfortunately, this is not the case here as elaborated below.

Earnings ESP: Earnings ESP represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Enbridge has an ESP of -3.09% as the Most Accurate Estimate stands at 50 cents while the Zacks Consensus Estimate is pegged at 51 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Enbridge currently carries a Zacks Rank #3. Though a Zacks Rank of 3 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.  

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

Energy Stocks With Favorable Combination

Here are some companies from the energy space which, according to our model, have the right combination of elements to post an earnings beat in the upcoming releases.

Comstock Resources (CRK - Free Report) has a Zacks Rank #2 and an Earnings ESP of +11.95%. The company is scheduled to report quarterly earnings on May 9.You can see the complete list of today’s Zacks #1 Rank stocks here.

Chaparral Energy (CHAP - Free Report) has a Zacks Rank #2 and an Earnings ESP of +110.00%. The company is set to report first-quarter earnings on May 9.

Canadian Natural Resources Limited (CNQ - Free Report) has a Zacks Rank #1 and an Earnings ESP of +0.85%. The company is slated to report first-quarter earnings on May 9.

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