Can Wisconsin Energy (WEC) Beat Q1 Earnings Estimates? - Analyst Blog
Wisconsin Energy Corp. WEC will release first-quarter 2015 earnings results before the market opens on May 5, 2015. Though the utility reported a negative earnings surprise of 1.75% in the last quarter, we expect it to beat expectation this quarter.
Why a Likely Positive Surprise?
Our proven model shows that Wisconsin Energy is likely to beat earnings because it has the right combination of two key ingredients. 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) for this to happen. This is the case here.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +2.44%. This is because the Most Accurate estimate is pegged at 84 cents while the Zacks Consensus Estimate stands slightly lower at 82 cents.
Zacks Rank: The combination of Wisconsin Energy’s Zacks Rank #2 and +2.44% ESP makes us fairly confident of an earnings beat.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
What's Driving the Better Than Expected Earnings?
The ongoing improvement in the economic conditions of Wisconsin Energy’s service territories is acting as a tailwind, which will likely be reflected in first-quarter 2015 results. However, the quarter should be up against difficult comparisons as the prior-year period was hit by severe winter temperatures which drove record demand for natural gas.
Meanwhile, strategic investments to strengthen its infrastructure will enable the company to serve its customers more efficiently. The company also raised its quarterly dividend by 8.3% to 42.25 cents a share during the first quarter, a testament of its strong performance and true to the regulatory nature of its business.
Other Stocks to Consider
Here are some other utilities worth considering on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter.
UGI Corporation UGI has an earnings ESP of +5.09% and carries a Zacks Rank #2.
Dominion Resources, Inc. D has an earnings ESP of +1.04% and carries a Zacks Rank #3.
Consolidated Edison, Inc. ED has an earnings ESP of +1.71% and carries a Zacks Rank #3.
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WISC ENERGY CP (WEC): Free Stock Analysis Report
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