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Is Wisconsin Energy Poised to Beat Earnings Again?

Zacks Equity Research

We expect utility service provider Wisconsin Energy Corp. (WEC) to beat expectations when it reports first-quarter 2014 results on Apr 30, 2014.

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 factors.

Positive Zacks ESP: The Earnings ESP (Expected Surprise Prediction), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +2.41%. This is a meaningful and leading indicator of a likely positive earnings surprise for this company.

Zacks #2 Rank (Buy): The stocks with Zacks Ranks of #1, 2 and 3 have a significantly higher chance of beating earnings. The Sell rated stocks (#4 and 5) should never be considered going into an earnings announcement.

The combination of Wisconsin Energy’s Zacks Rank #2 (Buy) and +2.41% ESP make us confident of a positive earnings beat on Apr 30.

What is Driving Better-than-Expected Earnings?

Wisconsin Energy could be up for another bottom-line outperformance in first quarter 2014 following its positive earnings streak in the last four quarters. A key factor that could act as a growth driver includes the steady economic improvement in the state of Wisconsin.

Continued customer additions signal better earnings prospects for the company in the first quarter. Wisconsin Energy witnessed a 6.4% and a more than 15% increase in electric service connections as well as natural gas installations, respectively in 2013 from 2012.

In addition, Wisconsin Energy’s ambitious biomass-plant attained full commercial operability in Nov 2013. This will allow the company to meet rising industrial demand for electricity and in turn will lend additional upside to its sales stream.

Moreover, Wisconsin Energy’s cost-abatement efforts via gradual conversion of its coal-fired units to natural gas-fired plants will help minimize operating costs. This could certainly enhance the company’s profitability.

Other Stocks to Consider

Wisconsin Energy is not the only company looking up this earnings season. We also see likely earnings beat coming from other utility providers.

NRG Yield, Inc. (NYLD), Earnings ESP of +23.53% and Zacks Rank #1 (Strong Buy).

Exelon Energy Corp. (EXC), Earnings ESP of +6.94% and Zacks Rank #2 (Buy).

Ameren Corp. (AEE), Earnings ESP of +6.25% and Zacks Rank #2 (Buy).

Read the Full Research Report on WEC
Read the Full Research Report on NYLD
Read the Full Research Report on AEE
Read the Full Research Report on EXC

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