Will PPL Corporation (PPL) Miss Q3 Earnings Expectations?
PPL Corporation (PPL) is scheduled to report third-quarter 2014 results before the opening bell on Nov 4. Last quarter, PPL Corporation posted an impressive 20.5% positive earnings surprise. Let’s see how things are molding for the third quarter.
Factors to Consider This Quarter
Allentown, PA-based PPL Corporation is a diversified utility holding company. The company primarily generates electricity from power plants in the northeastern, northwestern and southeastern U.S.
PPL Corporation operates primarily through rate-based regulated segments which have a stable revenue generating capacity. In 2014, the company expects rate-based growth to be around $1.8 billion. PPL Corporation is currently streamlining its operations through spinning off its businesses and asset monetization. This will help the company to manage its regulated operations more efficiently.
A milder U.S. summer this year has led to lower demand for utility services, which might impact PPL Corp.'s bottom line this quarter.
However, stringent environmental regulation for cutting down carbon emissions might drive up PPL Corp.’s expenses as it generates a substantial portion of electricity from coal-fired facilities.
Earnings Whispers?
Our proven model does not conclusively show that PPL Corporation will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate Estimate and Zacks Consensus Estimate are currently at 53 cents per share.
Zacks Rank: PPL Corporation’s Zacks Rank #3 when combined with a 0.00% ESP makes an earnings prediction inconclusive.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks in the utility space you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:
Consolidated Edison, Inc. (ED) has an earnings ESP of +2.80% and a Zacks Rank #2 (Buy).
ALLETE, Inc. (ALE) has an earnings ESP of +2.78% and a Zacks Rank #3 (Hold).
Duke Energy Corp. (DUK) has an earnings ESP of +0.66% and a Zacks Rank #3 (Hold).
Read the Full Research Report on PPL
Read the Full Research Report on ED
Read the Full Research Report on DUK
Read the Full Research Report on ALE
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