) is set to release its third-quarter 2013 financial results
before the market opens on Oct 31, 2013. The utility company
reported a negative surprise of 4.17% in the last quarter. Let's
see how things are shaping up prior to this announcement.
Factors to Consider this Quarter
NiSource mainly focuses on core, rate-regulated asset-based
businesses. The company experienced positive rate changes from
its Pennsylvania case to recoup its prior invested funds. The new
rate, effective Jul 1, 2013, which will likely boost its
near-term revenue stream.
In Aug 2013, the company completed the natural gas compressor
upgrade project at its Majorsville compressor facility in Dallas,
W. Va. The new compressors have increased the facility's capacity
by 1800 horsepower, thereby boosting service reliability and
increasing throughput volumes by 70-80 million cubic feet per
day, which is double the previous level.
On the flipside, NiSource's electricity-generating assets are
primarily fueled by coal and natural gas. We believe volatile
commodity prices and fluctuations in associated transportation
costs will likely increase the company's operating expenses.
Further, the company's distribution and transmission activities
are exposed to threats from leakages, accidents and natural
disasters, which could lead to extensive financial losses.
NiSource experienced a pipeline explosion accident in late 2012.
Our proven model does not conclusively show that NiSource is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Zacks
(Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for
this to happen. This is not the case here.
Negative Zacks ESP:
Earnings ESP, which represents the difference between the Most
Accurate estimate and the Zacks Consensus Estimate, is -5.56%.
Zacks Rank #3 (Hold):
NiSource's Zacks Rank #3 (Hold) combined with an ESP of -5.56%
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.
Other Stocks to Consider
Here are some companies directly related to the utility industry
which are worth considering on the basis of our model. They have
the right combination of elements to post an earnings beat this
Alliant Energy Corporation
), Earnings ESP of +4.55% and Zacks Rank #2 (Buy).
), Earnings ESP of +1.37% and Zacks Rank #2 (Buy).
Black Hills Corporation
), Earnings ESP of +2.27% and Zacks Rank #3 (Hold).
BLACK HILLS COR (BKH): Free Stock Analysis
ALLIANT ENGY CP (LNT): Free Stock Analysis
NISOURCE INC (NI): Free Stock Analysis Report
NORTHEAST UTIL (NU): Free Stock Analysis
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