Energy services holding company,
AGL Resources Inc.
) is set to report second-quarter 2014 results after the market
closes on Jul 29.
Last quarter, AGL Resources failed to meet the Zacks Consensus
Estimate and posted a negative earnings surprise of 25.95% - the
second consecutive quarterly miss for the company. Let's see how
things are shaping up for this announcement.
Factors to Consider
Positioned in a niche industry with high barriers to entry, this
energy services holding company enjoys near-monopoly status in its
area of operation. On top of this, the utility's best-in-class cost
control and recession-proof business model presents additional
growth opportunities for AGL Resources.
The company is also set to benefit from continued production growth
in Marcellus and the need to transport the produce to fulfill the
increasing natural gas demand. During the first-quarter conference
call, AGL Resources raised its 2014 earnings per share (EPS)
guidance in the range of $2.80 to $2.90. This could be an
indication of improved results.
However, operating results for AGL Resources 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 will not likely benefit much.
Our proven model does not conclusively show that AGL Resources
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here, as you will see below.
Earnings ESP, which represents the difference between the Most
Accurate Estimate and the Zacks Consensus estimate, is 0.00%.
Though AGL Resources' Zacks Rank #2 (Buy) increases the predictive
power of ESP, the company's ESP of 0.00% makes surprise prediction
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies from the utilities industry for
investors to consider, that, according to our model have the right
combination of elements to post an earnings beat this quarter:
Ameren Corporation (
) has Earnings ESP of +14.04% and a Zacks Rank #2.
Consolidated Edison, Inc. (
) has Earnings ESP of +9.26% and a Zacks Rank #2
BCE Inc. (
) has Earnings ESP of +6.25% and a Zacks Rank #2.
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AGL RESOURCES (GAS): Free Stock Analysis Report
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