CenterPoint Energy, Inc.
) is slated to release its first quarter 2014 financial results
before the opening bell on May 1, 2014. The company posted a
negative earnings surprise of 3.70% in the preceding quarter.
Let's see how things are shaping up prior to this announcement.
Factors to Consider
CenterPoint, a public utility holding company in the U.S.,
provides several services including electric transmission and
distribution, natural gas distribution and competitive natural
gas retailing. The company serves more than five million metered
customers primarily in Arkansas, Louisiana, Minnesota,
Mississippi, Oklahoma and Texas.
In fourth quarter 2013, the company's earnings declined 16.1%
year over year without the benefit of inclement weather at its
Although higher demand resulting from severe cold weather may
generate top line growth for the company, we remain apprehensive
about CenterPoint's operating expenses. The company expects an
increase in 2014 operating expenses owing to the upgrade of grid
and safety facilities. Hence, rising operating expenses may hit
the company's bottom line. Notably, for 2014, the company expects
its earnings to be in the range of $1.08 − $1.17 per share, much
lower than 2013 profit level of $1.26 per share.
Accordingly, our proven model does not conclusively show that
CenterPoint 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 #1, 2 or 3 for
this to happen. This is not the case here.
Negative Zacks ESP:
The Earnings ESP is -8.82%. That is because the Most
Accurate estimate stands at 31 cents while the Zacks Consensus
Estimate is pegged higher at 34 cents. That is a difference of
CenterPoint's Zacks Rank #3 (Hold) when combined with a negative
ESP makes surprise prediction difficult. We caution against
stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into
the earnings announcement.
Other Stocks to Consider
Here are some companies in the diversified utility space having
the right combination of elements to post an earnings beat this
NRG Yield, Inc.
) has an earnings ESP of +23.53% and carries a Zacks Rank #1
) has an earnings ESP of +28.57% and carries a Zacks Rank #2
Alliant Energy Corp.
) has an earnings ESP of +1.30% and carries a Zacks Rank #2
CENTERPOINT EGY (CNP): Free Stock Analysis
CALPINE CORP (CPN): Free Stock Analysis
ALLIANT ENGY CP (LNT): Free Stock Analysis
NRG YIELD INC-A (NYLD): Free Stock Analysis
To read this article on Zacks.com click here.