Electric power company,
) is set to report fiscal second-quarter 2014 results on Feb 4,
after the market closes. In the last quarter, it delivered a
76.9% negative earnings surprise. Let's see how things are
shaping up for this announcement.
Factors to Consider
In the first quarter of fiscal 2014, Pike posted disappointing
financial results. Earnings per share plunged 88.5% year over
year to 3 cents due to a decline in sales and margins. Revenues
fell 21.0% year over year to $193.3 million due to a reduction in
storm-related activities. The revenue decline led to a drop in
margins, wherein gross margin went down 480 basis points year
over year to 10.3%.
Although management expects a hike in revenues in the fiscal
second quarter, storm-related activities are expected to remain
low. Considering the major contribution of storm-related revenues
to the total revenue, we do not expect to see much improvement in
the to-be-reported quarter.
Our proven model does not conclusively show that Pike 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 of #1, 2 or 3 for
this to happen. That is not the case here as we see below.
This is because the Most Accurate estimate stands at 8 cents,
flat with the Zacks Consensus Estimate. Hence, the difference is
Pike's Zacks Rank #3 (Hold) when combined with a 0.00% ESP 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
Other Stocks to Consider
Here are other companies you may want to consider as our model
shows they have the right combination of elements to post an
earnings beat this quarter:
Otter Tail Corporation
), Earnings ESP of +9.76% and a Zacks Rank #2 (Buy).
Wisconsin Energy Corp.
), Earnings ESP of +6.90% and a Zacks Rank #2.
Westar Energy, Inc.
), Earnings ESP of +3.57% and a Zacks Rank #2.
OTTER TAIL CORP (OTTR): Free Stock Analysis
PIKE ELECTRIC (PIKE): Free Stock Analysis
WISC ENERGY CP (WEC): Free Stock Analysis
WESTAR ENERGY (WR): Free Stock Analysis
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