The Laclede Group Inc.
) is set to release its third quarter fiscal 2014 results before
the opening bell on Thursday, Aug 7.
In the preceding three-month period, The Laclede Group delivered
a positive 27.4% earnings surprise - the second outperformance in
the last 4 quarters - aided by extreme cold weather conditions that
boosted natural gas' demand for heating. Let's see how things are
shaping up for this announcement.
Factors to Consider This Quarter
Positioned in a niche industry with high barriers to entry, this
energy services holding company enjoys a strong competitive
position in its area of operation. On top of this, the utility's
recession-proof business model presents additional growth
opportunities for The Laclede Group, which is in the process of
acquiring Alabama Gas Corp. from Energen Corp. (
) for $1.6 billion.
However, operating results for The Laclede Group are affected by
weather conditions and may vary on a seasonal and quarterly basis.
Usually, almost 75% of the deliveries and sales occur during the
six-month period of October to March. Thus, the second-quarter
results are likely to be softer. The utility's below-average new
customer addition growth in its service territory is also expected
to play spoilsport.
Our proven model does not conclusively show that The Laclede
Group is likely to beat earnings this quarter. That is because a
stock needs to have both a positive
(Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for
this to happen. Unfortunately, this is not the case here, as
The Laclede Group's earnings ESP is 0.00%, as the Most Accurate
estimate and the Zacks Consensus Estimate both stand at 35
The Laclede Group carries a Zacks Rank #2 (Buy). Though a favorable
Zacks Rank increases the predictive power of ESP, the company's ESP
of 0.0% makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Stocks to Consider
While earnings beat looks uncertain for The Laclede Group, here
are some companies you may want to consider on the basis of our
model, which shows that they have the right combination of elements
to post an earnings beat this quarter:
Consolidated Edison Inc. (
) has an Earnings ESP of +9.26% and holds a Zacks Rank #2.
Crescent Point Energy Corp. (
) has an Earnings ESP of +28.21% and holds a Zacks Rank #2.
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LACLEDE GRP INC (LG): Free Stock Analysis
CRESCENT PT EGY (CPG): Free Stock Analysis
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ENERGEN CORP (EGN): Free Stock Analysis Report
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