) to beat expectations when it reports fourth quarter 2012
results on Feb 21, 2013.
Why a Likely Positive Surprise?
Our proven model shows that PG&E Corp. is likely to beat
earnings because it has the right combination of the two key
Zacks #3 Rank (Hold):
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 +1.75%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for the shares.
PG&E Corp.'s Zacks Rank #3 (Hold) when combined with a
positive earnings ESP increases the chance of beating earnings.
The combination of PG&E Corp.'s Zacks Rank #3 (Hold) and
1.75% ESP makes us confident of a positive earnings beat on Feb
What is Driving Better than Expected Earnings?
PG&E Corp. has a solid portfolio of regulated utility
assets that offer a stable earnings base and substantial
long-term growth potential. Moreover, the company's strong
balance sheet and cash flows provide substantial financial
flexibility and cushion against the currently challenging
business environment. Going forward, favorable decisions from
regulators, long-term supply contracts, diversification into
alternative power sources, a continuous dividend paying strategy
and infrastructure improvement programs bode well for the
The positive trend is seen in the trailing four-quarter average
surprise of 8.78%, greatly helped by the 5.68% surprise in the
last reported quarter. This was possible because of the company's
strategy of optimizing generation margins by improving its cost
structure, performance and reliability of its nuclear as well as
Other Stocks to Consider
PG&E Corp. is not the only firm looking up this earnings
season. We also see likely earnings beats coming from these three
NV Energy, Inc.
), earnings ESP of +14.29% and Zacks #3 Rank (Hold)
), earnings ESP of +75% and Zacks #3 Rank (Hold).
DYNEGY INC-NEW (DYN): Free Stock Analysis
NV ENERGY INC (NVE): Free Stock Analysis
ONEOK PARTNERS (OKS): Free Stock Analysis
PG&E CORP (PCG): Free Stock Analysis
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ONEOK Partners, L.P.
), earnings ESP of +3.08% and Zacks #3 Rank (Hold).