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DTE Energy (DTE) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

DTE Energy Corporation DTE is set to report third-quarter 2019 results on Oct 28, before market open. In the last reported quarter, the company delivered a negative earnings surprise of 9.17%.

In the trailing four quarters, the company came up with an average positive earnings surprise of 4.32%.

Let's take a closer look at the factors influencing DTE Energy’s upcoming results.

Factors at Play

Although DTE Energy’s service territories experienced below-average precipitation during the first half of the third quarter, the latter half experienced extreme precipitation. Notably, in September, Michigan was ranked the wettest state on record for the January-September period. This is likely to have resulted in higher electricity demand, which, in turn, must have boosted DTE Energy’s top line in the third quarter.

In line with this, the Zacks Consensus Estimate for the company’s third-quarter revenues is pegged at $3.82 billion, which indicates 7.5% improvement from the figure reported in the year-ago quarter.

In the second quarter, the company’s earnings took a hit due to its Reduced Emissions Fuel (REF) tax equity transactions that occurred in the fourth quarter of 2018. Assuming that such a trend continued in the third quarter, the company’s bottom line is likely to reflect an earnings decline.

Moreover, storm activities highlighted by strong winds, hail and tornadoes during August and September might have resulted in increased expenses related to electricity restoration.

However, on a brighter note, the company during the second-quarter earnings call predicted an increase in earnings for its Gas Storage and Pipeline segment for the second half of the year. This increase can be partially attributed to positive synergies expected from the acquisition of an additional 30% of a natural gas gathering system, Link, developed by Momentum Midstream LLC.

This is likely to get reflected in the company's bottom line in the upcoming quarterly results.

Considering the aforementioned developments, the Zacks Consensus Estimate for DTE Energy’s third-quarter earnings is pegged at $2 per share, indicating a 6.1% decline from the figure reported in the year-ago quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for DTE Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here.

Earnings ESP: DTE Energy has an Earnings ESP of -3.84%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

DTE Energy Company Price and EPS Surprise

 

DTE Energy Company Price and EPS Surprise

DTE Energy Company price-eps-surprise | DTE Energy Company Quote

 

Stocks to Consider

Here are a few players from the Utilities sector with the right combination of elements to post an earnings beat in the to-be-reported quarter.

The Southern Company SO has an Earnings ESP of +0.60% and a Zacks Rank #1. The company is expected to release third-quarter results on Oct 30.

American Electric Power Company, Inc. AEP has an Earnings ESP of +2.68% and a Zacks Rank #2. The company is scheduled to release third-quarter results on Oct 24.

Entergy Corporation ETR has an Earnings ESP of +2.04% and a Zacks Rank #3. The company is expected to release third-quarter 2019 results on Oct 30.

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