), a diversified energy company, is scheduled to release
second-quarter 2014 financial results before the market open on Aug
5. In the last reported quarter, the company delivered a negative
earnings surprise of 4.88%. Let us see how things are shaping up
for this announcement.
Factors to Consider
FirstEnergy operates one of the largest transmission networks in
the U.S. and systematically invests capital to improve its quality
of services. In the second quarter, the company completed
inspections and equipment maintenance drill at its operating
subsidiaries to prepare for the summer months and ensure service
As FirstEnergy operates in a competitive space, maintenance of
quality is essential to retain and expand its customer base. A
major portion of FirstEnergy's generating capacity comes from
coal-fired and nuclear power units, which expose the company to
environment related regulatory risks.
In the to-be-reported quarter FirstEnergy's subsidiaries Mon Power
and Potomac Edison filed for a rate increase to the Public Service
Commission of West Virginia. The rate request is for $103 million
and the decision is expected to come by Feb 2015. Since the
regulated operations comprise nearly 85% of FirstEnergy's business
mix, the company depends on positive regulatory decisions to drive
its modernization plan forward.
Our proven model does not show that FirstEnergy Corporation 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.
Negative Zacks ESP
: That is because the Earnings ESP, which represents the difference
between the Most Accurate estimate of 44 cents per share and the
Zacks Consensus Estimate of 48 cents, is -8.33%.
Zacks Rank# 3
: FirstEnergy Corporation carries a Zacks Rank #3 (Hold). Though a
Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the
company's ESP of -8.33% indicates that FirstEnergy is going to miss
Other Stocks to Consider
Here are some companies in the same space you may want to consider
as our model shows they have the right combination of elements to
post an earnings beat this quarter:
Consolidated Edison, Inc. (
) has Earnings ESP of +9.26% and a Zacks Rank #1 (Strong Buy).
Ameren Corporation (
) has Earnings ESP of +14.04% and a Zacks Rank #2 (Buy).
Sempra Energy (
) has Earnings ESP of +3.60% and a Zacks Rank #3 (Hold).
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