Will Debt Management Reflect in NiSource's (NI) Q3 Earnings?
We expect NiSource NI to beat expectations when it reports third-quarter 2017 results on Nov 1, before the opening bell. Last quarter, the company’s earnings were in line with the Zacks Consensus Estimate.
Why a Likely Positive Surprise?
Our proven model shows that NiSource is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The company’s Earnings ESP is +7.69%.
Zacks Rank: NiSource currently carries a Zacks Rank #2. The combination of the company’s favorable Zacks Rank and positive ESP makes us reasonably confident of a positive surprise this season.
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
NiSource, Inc Price and EPS Surprise
NiSource, Inc Price and EPS Surprise | NiSource, Inc Quote
Factors to Consider
For the third quarter, the Zacks Consensus Estimate for NiSource’s revenues is pegged at $901 million, indicating 4.4% increase year over year. NiSource has a 100% regulated utility business model.
We anticipate the increase in total revenues to be driven by the company’s execution of capital projects, new rates in electric and gas operations, improvements to its electric generating stations, and the construction of new transmission facilities, to replace aging infrastructure.
NiSource successfully refinanced about $1 billion in debt during second quarter with low rate debts that will drive interest expense savings not only in this quarter but in future as well. The debt refinance will result in 2 cents of incremental earnings for the company.
We expect these factors to positively drive the performance of the company in the current quarter.
Other Stocks to Consider
NiSource is not the only company in the industry looking up this earnings season. We can expect earnings beats from these companies as well.
Allete, Inc. ALE has an Earnings ESP of +2.89%. It sports Zacks Rank #1 and is expected to report third-quarter 2017 earnings on Nov 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pinnacle West Capital Corporation PNW has an Earnings ESP of +0.14%. It carries Zacks Rank #2 and is anticipated to report third-quarter 2017 earnings on Nov 3.
Exelon Corporation EXC has an Earnings ESP of +0.58%. The company flaunts a Zacks Rank #3 and is anticipatedto report third-quarter 2017 earnings on Nov 2.
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