Will Sempra Energy (SRE) Beat Earnings Estimates Again? - Analyst Blog
Energy services holding company, Sempra Energy SRE is expected to beat expectations when it reports first-quarter 2015 earnings results before the opening bell on May 5, 2015.
Last quarter, Sempra Energy had recorded a 12.84% positive earnings surprise. Let’s see how things are shaping up for the first quarter.
Factors at Play
The company is investing in infrastructure development projects, following a systematic asset divestment strategy and focusing on renewable ventures. These are expected to act as catalysts for future performance.
In the first quarter, San Diego Gas & Electric (SDG&E), a subsidiary of Sempra Energy, commenced operation on the East County substation project that is operating as an integral part of SDG&E's electric transmission system.
The focus on renewable expansion, particularly solar and wind, will help Sempra Energy to deliver emission-free power to its customers. In 2014, Sempra’s another business unit, Southern California Gas Company (SoCalGas) inked a partnership with Consolidated Edison Development (ConEd) for the 75 megawatt (“MW”) Broken Bow II wind project in Custer County, NV. With this deal, Sempra Energy has successfully partnered with ConEd over 700 MWs of renewable power projects, including 7 different solar plants and the Broken Bow 2 Wind Farm.
Why a Likely Positive Surprise?
Our proven model shows that Sempra Energyis likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +9.16%. This is because the Most Accurate estimate of $1.43 per share is higher than the Zacks Consensus Estimate of $1.31 cents. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank: Sempra Energy currently carries a Zacks Rank #2 (Buy). The combination of Sempra Energy’s Zacks Rank #2 and +9.16% ESP makes us positive of a likely earnings beat this season.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Other Stocks to Consider
Sempra Energyis not the only stock looking up this earnings season. We also see likely earnings beat coming from these three utility peers.
Wisconsin Energy Corp. WEC has an earnings ESP of +2.44% and a Zacks Rank #2.
UGI Corp. UGI has an earnings ESP of +5.09% and a Zacks Rank #2.
Consolidated Edison, Inc. ED has an earnings ESP of +1.71% and a Zacks Rank #3 (Hold).
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SEMPRA ENERGY (SRE): Free Stock Analysis Report
WISC ENERGY CP (WEC): Free Stock Analysis Report
CONSOL EDISON (ED): Free Stock Analysis Report
UGI CORP (UGI): Free Stock Analysis Report
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