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Dominion (D) to Report Q4 Earnings: What's in the Cards?

Zacks Equity Research

Dominion Energy D is scheduled to report fourth-quarter 2018 results on Feb 1, before the opening bell. The company surpassed estimates in the last four quarters, delivering average positive earnings surprise of 6.99%.

Factors to Consider

Dominion Energy expects fourth-quarter earnings in the range of 80-95 cents per share compared with 91 cents in the year-ago quarter. The Zacks Consensus Estimate for the same is pegged at 91 cents, in line with the year-ago figure.

Dominion’s fourth-quarter earnings are expected to gain from the Cove Point Liquefaction project and benefits from tax reforms. Moreover, the company should have benefited from increasing electricity demand from data center campuses and residential customers during the quarter. However, higher share count and lower solar tax credits are likely to offset these positives to some extent. In addition, higher financing costs are likely to have an adverse impact on earnings.

During the quarter, the company completed its previously announced non-core asset divestiture plans. It will utilize the proceeds to lower its debt level, which is currently higher than the industry average.

Dominion Energy Inc. Price and EPS Surprise

Dominion Energy Inc. Price and EPS Surprise | Dominion Energy Inc. Quote

Here is What Our Quantitative Model Predicts:

Our proven model shows that Dominion is unlikely to beat estimates in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP (which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass estimates. That is not the case here as you will see below.

Earnings ESP: The company’s Earnings ESP is -1.04%. This is because the Most Accurate Estimate of 90 cents is pegged lower than the Zacks Consensus Estimate of 91 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Dominion carries a Zacks Rank #3, which when combined with a negative Earnings ESP, lowers the possibility of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revision.

Stocks to Consider

Investors may consider the following companies from the same industry that have the right combination of elements to beat estimates in the quarter to be reported:

Ameren Corporation AEE has an Earnings ESP of +4.62% and a Zacks Rank #1. The company is expected to report fourth-quarter 2018 earnings on Feb 14.

ALLETE Inc.. ALE has an Earnings ESP of +5.26% and carries a Zacks Rank #2. The company is slated to report fourth-quarter 2018 results on Feb 14.

Portland General Electric Company POR has an Earnings ESP of +4.19% and a Zacks Rank #1. The company is expected to report fourth-quarter 2018 numbers on Feb 15.

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