We expect diversified utility company
) to beat expectations when it reports first-quarter 2014 results
on May 1, 2014.
Why a Likely Earnings Beat?
Our proven model shows that PPL Corp. is likely to beat earnings
this quarter. That is because a stock needs to have both a
(Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for
this to happen. This is not the case here.
Positive Zacks ESP:
This is because the Most Accurate estimate stands at 71 cents
while the Zacks Consensus Estimate is 68 cents, resulting in
+4.41% ESP. This is a meaningful and leading indicator of a
likely positive earnings surprise.
Zacks #2 Rank (Buy):
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 while going into an
The combination of PPL Corp.'s Zacks Rank #2 (Buy) and +4.41% ESP
make us confident of a positive earnings beat on May 1.
What is Driving Better-than-Expected Earnings?
PPL Corp. continues to expand its existing operations through
construction of new assets. The company plans to spend a total of
around $18.4 billion between 2014 and 2018 under construction
projects. These initiatives will enable PPL Corp. to increase its
scale of operations and deliver uninterrupted services.
In Nov 2013, the Virginia State Corporation Commission gave
approval to PPL Corp.'s unit Kentucky Utilities Company to
increase annual base electricity rates. The company's projected
regulated rate base growth is $130 billion within a period of
2014 and 2018. The approval of rate hike appeal from the
commissions will supplement the company's revenues.
We expect PPL Corp.'s upcoming first-quarter 2014 result to
improve due to cold winter season in the U.S.
Other Stocks to Consider
Here are some other utility companies worth considering as our
model shows they have the right combination of elements to post
an earnings beat this quarter.
) has an earnings ESP of +6.94% and carries a Zacks Rank #2
OGE Energy Corp.
) has an earnings ESP of +4.17% and carries a Zacks Rank #2
Public Service Enterprise Group Inc.
) has an earnings ESP of +7.61% and carries a Zacks Rank #2
EXELON CORP (EXC): Free Stock Analysis Report
OGE ENERGY CORP (OGE): Free Stock Analysis
PUBLIC SV ENTRP (PEG): Free Stock Analysis
PPL CORP (PPL): Free Stock Analysis Report
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