We expect utility company
) to beat expectations when it reports fourth-quarter 2012
results on Feb 13, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Calpine Corporation is likely to beat
earnings because it has the right combination of key factors.
Positive Zacks ESP:
Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at +100.00%. This
is meaningful and a leading indicator of a likely positive
earnings surprise for this company.
Zacks #3 Rank (Hold):
We note that 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
The combination of Calpine Corporation's Zacks Rank #3 (Hold) and
+100.00% ESP makes us confident of a positive earnings beat this
Calpine Corporation's steady capital investment program in
several growth projects along with divesture of non-performing
assets, portfolio realignment and cost-curtailment initiatives
are expected to drive earnings.
The company continues to restructure its generation portfolio by
hiving off assets and adding new properties. Calpine Corporation
received $392 million in 2012 by selling its Riverside Energy
Center to a unit of
Alliant Energy Corporation
). We expect these transactions along with an 800-megawatt
Californian growth project to help Calpine Corporation meet the
growing demand from Texas and Delaware.
The positive trend is seen in the trailing four quarter average
surprise of 42.96%. Calpine Corporation's third-quarter 2012
surprise was 9.52%. Benefits from acquisitions, asset realignment
and a strong cash position aided the surprise.
Other Stocks to Consider
Calpine Corporation is not the only organization looking up this
earnings season. We also expect other utility providers to beat
Ormat Technologies Inc.
), earnings ESP of +50.00% and Zacks Rank #2 (Buy).
), earnings ESP of +2.17% and Zacks Rank #3 (Hold).
CALPINE CORP (CPN): Free Stock Analysis
ALLIANT ENGY CP (LNT): Free Stock Analysis
ORMAT TECH INC (ORA): Free Stock Analysis
PPL CORP (PPL): Free Stock Analysis Report
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