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Duke Energy Likely to Miss

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Duke Energy Corporation (DUK - Free Report) is set to report fourth quarter and full year 2012 results on Feb 13, 2013. Last quarter it posted a 1.38% positive earnings surprise. Let’s see how things are shaping up prior to this announcement.

Factors to Consider This Quarter

Duke Energy is loaded with a number of project developments, especially in Arizona and California. These developments indicate the company’s commitment to meet electricity needs through advanced and cleaner generation. Given the current pulse in the U.S. market that favors sustainable green generation, we believe these projects would bode well for Duke Energy going forward. Overall, these activities would bring in revenue for the company.

Also, the acquisition of Progress Energy Inc. seems to be a smart move made by the company. It has increased the company’s ability to build new power plants to meet future greenhouse-gas emissions limits. However, the present unfavorable macro backdrop, predominantly fossil-fuel based generation assets, tepid demand for electricity, a sudden change of its CEO and pending regulatory cases have clouded these positives.

Earnings Whispers?

Our proven model does not conclusively show that Duke Energy is likely to beat earnings this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Negative Zacks ESP:  This is because the Most Accurate estimate stands at 64 cents per share while the Zacks Consensus Estimate is at 65 cents per share. That is a difference of -1.54%.

Zacks #3 Rank (Hold): Duke Energy’s Zacks Rank #3 (Hold) when combined with a negative earnings ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Ormat Technologies Inc. (ORA - Free Report) has earnings ESP of +50% and carries a Zacks Rank #2 (Buy).

Consolidated Edison Inc. (ED - Free Report) has earnings ESP of +1.92% and carries a Zacks Rank #3 (Hold).

Entergy Corporation (ETR - Free Report) has earnings ESP of +7.80% and carries a Zacks Rank #3 (Hold).

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